Abstract: Small and medium-sized enterprises (SMEs) generate 33% of U.S. exports. These firms often seek supplier certifications to mitigate the liability of smallness and enhance global competitiveness or obtain domestic government contracts. Ethnic minority-owned SMEs may also counteract the liability of foreignness by leveraging the human and social capital of diasporas. Analyzing over 25,000 high-technology SMEs in the U.S., we find that global quality certification is associated with 55% higher odds of export execution, while domestic procurement certification is associated with 36% lower odds. Ethnic minority-owned SMEs exhibit stronger export intent, but weaker export execution than their non-minority counterparts. These effects vary substantially across diasporas and ethnic minority-owned SMEs strongly prefer to target exports towards firm owners’ regions of origin. Our results suggest that the benefits of globalization are not equally inclusive across different types of ethnic minority-owned SMEs in the U.S.
Keywords: globalization, exporting by SMEs, internationalization process, ethnic minorities, diaspora