Foreign Trade & Infrastructure: The Brazilian Small Business Reality

Abstract

Internationalization is a process in which organizations increase their economic activities in international markets. Specifically small business should aim internalization to become more competitive since their competitors are not only local companies but also multinational organizations. However, a medium or small size business from Brazil faces considerable challenges to internationalize such as the lack of Brazilian infrastructure. Therefore, given the importance of internationalization to the Brazilian economy and the role of small business in the global market, this study analyzes the struggles of a Brazilian small mining company through the exportation process of its main product—a high quality silica. As result, this study shows how significant can be national and international transportation costs as well as the costs related to wharfage. In fact, surprisingly, this study revealed that the costs related to national transportation are greater than the international shipment. We conclude that the main obstacle to enhance exportation in Brazil is in fact the transportation infrastructure, representing the bottleneck of Brazilian infrastructure even for small business focused on the national market.