The comprehensive study for the European Commission reveals a "substantial dead-weight loss effect" and questions the impact of some schemes designed to boost internationalisation in the small business sector.
A survey commissioned as part of the report shows that 37% of SMEs availing of business support initiatives said the schemes "merely facilitated operations without resulting necessarily in more or earlier international activities".
The vast majority of companies welcomed the backing of public authorities but around 10% said it was of "no help at all".
The report, produced by consulting firm EIM, also reveals that awareness and use of public support schemes remains low across Europe and recommends vigorous efforts to raise awareness.
According to the authors, policy measures aimed at stimulating innovation and internationalisation should be produced in tandem as there is a strong link between activities in international markets and innovation.
"It might also be considered to merge the agencies that are implementing these two types of policies," the report says.
25% of SMEs export their wares
The study claims 25% of SMEs in the EU are engaged in some form of exporting, with around half of those selling goods and services outside the internal market.
This figure is significantly higher than previous estimates that just 8% of SMEs were active in cross-border trade, sparking some scepticism over the findings.
However, the new study defines internationalisation as "all activities that put SMEs into a meaningful business relationship with a foreign partner," including exports, imports, foreign direct investment, subcontracting and technical cooperation.
It has yet to be released by the EU executive, as the methodology of the research is being examined.
For companies not currently active in international trade, the likelihood of moving into new markets in the near future is slim, with just 4% saying they have concrete plans to go international.
There is a direct link between the size of an enterprise and its level of internationalisation, according to the study, with larger companies much more likely to export.
A correlation was also found between the size of a company's home country and its tendency to trade across borders.
"The smaller the country, the more its SMEs are internationalised, but the SME's proximity to a national border does not have much effect on its level of internationalisation," the authors say.
Companies located close to a border are more active in doing business with their cross-border regions but this is not followed by being more internationally active in general. Established firms are also more likely to be trading internationally, it reports.
The highest percentage of internationalised SMEs is found in wholesale trade, mining, manufacturing and the auto sector, according to the research. Looking solely at exports, mining, manufacturing, wholesale trade and research are the top sectors for selling on overseas markets.
Cost and red-tape remain barriers to exporting
SMEs say the major internal barriers to internationalisation are the price of their own product and the high cost of exporting. External barriers highlighted in the survey include lack of capital, lack of public support and the cost or difficulties with paperwork associated with transport.
However, the incentives for trading internationally are clearly laid out in the report, which shows a strong correlation between foreign trade and high turnover growth. These companies are also more likely to create new jobs, according to the report.
