IDENTIFICATION OF THE CRITICAL

FACTORS AFFECTING THE

DEVELOPMENT OF EXPORT
COMPETITIVENESS OF THE SMALL &
MEDIUM SCALE ENTERPRISES:

A CASE STUDY BASED ON THE GEM &

JEWELLARY SECTOR IN SRI LANKA
 Background
Importance of export
i) Economic activity
ii) Driver of the economy
iii) Diversify

Potential of the product sector Source: Strategic Plan 2011

2015 (EDB)
i) Employment generation
ii) Historical background

SMEs contribution
 Research Problem
Inadequate export competitiveness
SMEs contribution/ Untapped sector
ITC trade statistics

Sources: ITC calculations based on UN COMTRADE

statistics, 2012
Sources: ITC calculations based on UN COMTRADE statistics, 2012
 Objectives of the Study
Overview the Gem & Jewellery sector in Sri Lanka &
existing mechanism of establishment for exporting Gem
& Jewellery products

Ascertain the factors affecting for the export

competitiveness of SMEs operating in the Gem &
Jewellery product sector in Sri Lanka

To recommend policies and strategies to overcome

obstacles & enhance export competitiveness of this
industry
 Literature Review/ Questionnaire Survey

Books, Journals, Research Papers, Web

Publications, Databases
Drafted conceptual framework &
questionnaire
Pilot survey & finalize the questionnaire
100 SMEs- Colombo, Galle,
Rathnapura, Kandy
Reliability & Factor analysis
Draft Conceptual Framework
Validation of the Conceptual Model
Questionnaire Survey
Characteristics of the surveyed sample
(EOf)
Method of sampling is random number
generation
Sample size= 100
sample size was fairly large (>30),
measurement scale interval assume
data is normally distributed
Export Orientation at Firm Level
Correlation Analysis & Regression Analysis
Model Summary & ANOVA Results
Results of Regression Analysis
 Research Hypothesis
Independent Variable Dependent Variable
Identifier Explanation

Positively and strongly

H1a Export orientation at firm level Export competitiveness correlated

Positively and strongly

H2a Human capital at firm level Export competitiveness correlated

Positively and strongly

Technological capability at firm correlated
H3a Export competitiveness
level

Negatively and strongly

H6a Skill labour at industry level Export competitiveness correlated
Stepwise regression analysis

Moderator analysis
Model Summary of the Stepwise Regression Analysis
Results of the stepwise Regression Analysis
Moderator Analysis
Moderator Analysis
Moderator Analysis
Moderator Analysis
Research Hypothesis
Conceptual Model Finalized
 Findings of the Study
Sri Lanka is loosing its market
share in the world trade & need to
enhance the export competitiveness
of the Gem & Jewellery industry

Majority of the Sri Lankan buyers

in the sector are gateway countries.
 Findings of the Study
The major areas to be improved to
enhance EC is export orientation,
human capital and technology
capability at the firm level.
Moderation effect by the CT is
significant on many variables (SL,
FCD, RD, V, GP, NoEM & MPP) in
the model
 Findings of the Study
Export orientation of the industry is
positive & possibility to enhance
supply
Skill Labour (SL) has strong
negative correlation with the export
competitiveness
 Findings of the Study
Gem & Jewellery industry depend on their own
marketing efforts as well as Government efforts
for receiving export orders
Allocated R & D budget for the sector is poor,
new innovations resulted by R & D and
transferring of such innovations to the firm level
also remains at poor level.
Product standardization of the industry has to be
improved
Industry has high need for branding
 PROPOSED STRATERGIES
Marketing (EMP) Strategy
Trade Hub Strategy
Research & Development (R & D) as a
Strategy
Technology Adaptation (ITC Data)
Product standardization as a strategy
Improving the Existing Mechanism of
Exports
 PROPOSED POLICIES
Identify the need to develop the Gem & Jewellery product sector at
the National level as a policy
Identify the key stake holder roles to be played within the policy
framework and avoid duplications as much as possible
The strategies proposed should be interconnected / interlinked
within the policy framework
Policy regulations should be developed or streamlined to avoid
unnecessary delays in customs, issuing mining licenses, issuing
export licenses etc.
Avoid loopholes with regard to implementation of the policies such
as delays in implementation, political influences etc.
Provide decision making powers to the key stake holders by act of
parliament
Thank You