The influence of export incentives on gold jewellery manufacturers’ decision to export : the case of selected Gauteng manufacturers

Abstract

Globally, governments encourage companies to pursue internationalisation in ways that include monetary and non-monetary export promotion support programmes. It is not known whether the various export promotion incentives available to South African companies are inducing them to consider exporting their products. This research study used semi-structured interviews to examine the influence of government export incentives on selected South African, Gauteng-based gold jewellery manufacturers' decision to export their products. The research sought to analyse exports of South African-manufactured gold jewellery in the past decade and the level of awareness among the selected manufacturers of the export incentives on offer. In addition, the study sought to determine the barriers to export that confront jewellery exporters in both the South African and international markets. The results of the study revealed that Gauteng based jewellery manufacturers are indeed influenced by export incentives to consider pursuing exports. The results further revealed that foreign clients prefer locally manufactured jewellery. This makes it difficult for South African jewellery manufacturers to claim a reasonable share in export markets. Additionally, in many cases transactions are processed through an internet system. Companies indicated that they had run afoul of fraudulent internet transactions, which resulted in most of their profit being stolen by unscrupulous individuals. The main recommendation is that manufacturers should only use established trading platforms and not engage with unsolicited buyers. In addition, the results revealed that manufacturers experienced delays with payments that resulted in substantial cash flow problems. The researcher recommends that manufacturers rely on upfront payment or part payment or procure export credit guarantees to cover such eventualities.