Internationalisation, internationalisation barriers, SMEs, exporting, Manufacturing Industry, Ethiopia.

The purpose of this study was to examine internationalisation barriers of manufacturing SMEs operating in Leather and Leather Products Industry located in the capital city of Ethiopia. The small and medium sized enterprises (SMEs) sector in Ethiopia is a significant group within the economy in terms of firm numbers and total employment. However, the SMEs sectors share of exports is disproportionately small, which raised considerable research concerns. Firm export propensity was the dependent variable and internal and external export barrier factors were used as explanatory variables. The study was conducted through mixed research design of quantitative survey and case study. From the population of manufacturing SMEs operating in the Leather and Leather products Industry, a sample was selected through the use of stratified random sampling to ensure the effective representation of the population of exporting and non-exporting SMEs in the capital of Ethiopia. In order to complement survey results nine (4 exporting and 5 non-exporting) SMEs were selected through critical case purposive sampling and an in-depth interviews were conducted. Statistical package for the social sciences (SPSS 20) was used to analyse the quantitative data whereas, qualitative data were analysed manually. Exploratory factor analysis with Varimax rotation and Binary logistic regression analysis are the analytical methods used. The statistical result showed that, logistics problem, insufficient finan