The role of government intermediaries in the internationalization of low- and medium-technology SMEs from developing countries : a case study of the Foreign Trade Commission of Mexico in Europe

This thesis assesses the role of the Government (in Mexico) and the Foreign Trade Council of Mexico (BANCOMEXT) in the internationalization of Mexican small and medium-sized enterprises (SMEs) in low- and medium-technology industries (LMT), which is the main group of firms serviced by BANCOMEXT-Europe. It also sheds light on the internal and external barriers this organization has identified as affecting the internationalization of these SMEs from developing countries (Mexico) in developed and distant markets (the European Union). To achieve this, a case study was undertaken in the six offices of BANCOMEXT (now PROMEXICO) in Europe: Italy, the UK, Germany, Spain, the Netherlands and France. BANCOMEXT is the most specialized governmental organization dealing with the internationalization of SMEs. The story told by the BANCOMEXT officers is analysed from the international business (the Uppsala model and the role of government intermediaries in the internationalization of SMEs), innovation and policy perspectives (the national system of innovation (NSI) approach) and the economic perspective. After the inductive analysis of the interviews undertaken with government officers from BANCOMEXT-Europe, 220 concepts that span the policy, macro, micro and meso levels were identified. The findings suggest that BANCOMEXT-Europe has mainly contributed to the internationalization of LMT-SMEs by the provision of information and by putting these firms in contact with potential clients abroad, but there are some unattended areas in which BANCOMEXT-Europe could expand its activities to contribute to the internationalization of LMT-SMEs. This thesis also uncovered that the SMEs' performance and the scope of BANCOMEXT's activities have been negatively affected by problems of different origins. Some of them are internal to Mexican SMEs, and there are also external barriers of both domestic and foreign origin inhibiting the SMEs' internationalization and explaining their very limited participation in foreign markets. These problems are enhanced by the environmental differences (differences in institutional set-ups) between Mexico and the EU and the geographical distance. In addition, this research provides empirical evidence from a developing country (Mexico) about the pervasive consequences of the lack of governmental support and policies for the internationalization of LMT-SMEs. This research calls for more active participation from the Government and policy makers to contribute to long-term economic growth from the supply side by improving SMEs' competitiveness through interactive learning, knowledge access and knowledge creation, innovation (incremental innovation) and the provision of favourable conditions for the internationalization of LMT-SMEs. Accordingly, a series of suggestions aimed at improving the competitiveness and internationalization of Mexican LMT-SMEs in the EU is also presented.