The Pricing Processes of Exporters

Abstract

Within the realm of research regarding the successful implementation of exporting strategies lies the often neglected topic area of export pricing. This subject has received relatively little attention over the years for a number of reasons, including a lack of formal export pricing theory and a reluctance among international managers to discuss their pricing practices. Concurrently, what research that has been conducted on this issue has been largely undertaken from the single country perspective. Future research, both exploratory and empirical, is called for.

This study attempts to define what export pricing strategies and processes are currently being utilized by exporting firms, what influences the adoption of these strategies, and how these strategies differ across cultures. Through a series of interviews with export managers from U.S. and Mexican manufacturing firms, an exploratory case study analysis was conducted to address four major issues, namely (1) what are the export pricing processes of the firm, (2) how do stated export objectives relate to these strategies, (3) what are the perceived barriers to the successful implementation of pricing practices, and (4) how do these factors differ between Mexican and U.S. exporters.     

Exporting and Firm Size

Abstract

This paper examines the extent to which small U.S.-based exporters experience problems and difficulties in their export operations not faced by larger U.S.-based exporters. Subsequently, we focus upon the differences between small and large firms with respect to three general areas: the perceived difficulty of various export activities; the perceived helpfulness of various agencies/organizations to export operations; the perceived helpfulness of various actions the federal government has taken or could take with regard to exporting. In areas where we have found significant large-versus small-firm differences we try to provide explanations. Finally, we offer both general and specific recommendations directed at overcoming the problems we have identified in order to facilitate exporting, particularly by small firms.     

Analyzing Export Behavior Through Managerial Characteristics and Perceptions: A Multiple Case-Based Research

ABSTRACT

The decision-maker's role in international activity is crucial, particularly in the case of small- and medium-sized enterprises (SMEs). However, the extant literature on internationalization is characterized by a lack of consensus among scholars as to what constitutes the managerial factor in determining exporting. Therefore, this study focuses on the following issue: Which are the decision-maker's characteristics and perceptions that may influence the export behavior of SMEs? To address this main research question, a multiple-case study method is applied across four Spanish exporting SMEs. The findings show that high educational level, language skills, high-risk tolerance, innovativeness, as well as strongly perceived export stimuli compared to low and relatively easy to overcome export barriers positively influence the export involvement and development in these investigated SMEs. The study provides further insights into the research topic by jointly studying managerial characteristics and perceptions in the Spanish context where the exporting activities have not been as widely studied so far.     

Managers' mobility,trade performance,and wages

Knowledge is key to the competitiveness and success of an organization and in particular of a firm. Firms and their managers acquire knowledge via a variety of different channels which are often difficult to track down and quantify. By matching employer–employee data with trade data at the firm level we show that the export experience acquired by managers in previous firms leads their current firm toward higher export performance, and commands a sizeable wage premium for the manager. Moreover, export knowledge is decisive when it is market-specific: managers with experience related to markets served by their current firm receive an even higher wage premium; firms are more likely to enter markets where their managers have experience; exporters are more likely to stay in those markets, and their sales are on average higher. Our findings are robust to controlling for unobserved heterogeneity and, more broadly, endogeneity and indicate that managers' export experience is a first-order feature in the data with an impact on a firm's export performance that is, for example, at least as strong as that of firm productivity.     

Where Do Firms Export,How Much and Why?

The empirical finding that exporting firms are more productive on average than non‐exporters has provoked a large theoretical literature based on models such as Melitz ( 2003 ), where more productive firms are more likely to overcome costs associated with trade. This paper investigates how closely the productivity heterogeneity framework fits the data from a firm‐level survey that includes information on export destinations and firm characteristics such as productivity. We find a high degree of unpredictable idiosyncratic participation in export markets by firms and a relatively weak positive correlation between the extent of a firm's export market participation and its export sales. We find that a small number of standard gravity variables provide a close fit to the country‐level determinants of trade but that greater variation results in more difficulty in explaining firm‐specific factors driving exporting behaviour. We also illustrate some elements of the dynamics over time in firm exporting patterns by destination. We show that lagged exporting activity has a significant effect on a firm's current exporting profile.     

Information Sources for New Ventures in the Turkish Clothing Export Industry

Recently "born global" firms have received considerable attention in the entrepreneurship and international business literature. Managers leading these new ventures typically face substantial resource constraints when seeking information critical to internationalization. This paper examines how the owner/operators of new ventures in the Turkish clothing export industry utilize their informal and formal social networks to acquire the information they need to export successfully. Field research and a survey of 250 Turkish clothing firm owners was conducted in Istanbul, Turkey to explore this issue. Findings indicate that informal social ties – particularly friends and family connections – are key sources of information for new-venture firm owners in this industry. Two formal organizations provide export information to entrepreneurs in the Turkish clothing industry, but only one was found to be easily accessible to new-venture firm owners: the Istanbul Textile and Clothing Exporters' Union (ITKIB). OLS regression results reveal that new venture firm owners' perceptions of ITKIB's importance can be explained by their perceived importance of various kinds of export-oriented information offered by this organization. In particular, perceived importance of export-law, market-research, and export-process information drive their perceptions of the importance of their ITKIB membership.     

US-Based Franchise Systems

Abstract

This study assesses both firm and relationship characteristics that may differentiate US-based franchisors that have internationalized operations from those that do not. Multiple discriminant analysis is used and shows that both firm and relationship characteristics are important discriminators. Not surprisingly, international franchise systems are larger and exhibit lower levels of solidarity. A surprising finding, however, is that international systems exhibit lower levels of opportunism, in spite of greater geographic and cultural proximity. Interestingly, a number of firm characteristics (number of domestic units, number of franchised versus company-owned units, firm age, and experience with franchising) and relationship characteristics (flexibility, trust, behavioral transparency, and effectiveness) were not significant discriminators between domestic and international franchisors. Implications of the findings and directions for future research are provided.     

The Effects of Cultural Distance,Free Trade Agreements,and Protectionism on Perceived Export Barriers

ABSTRACT

This article addresses the questions as to whether cultural distance and a free trade agreement with a trade bloc, as well as protectionism, have an impact on perceived external export barriers. The evaluation of a mail survey of chief executive officers from 459 Norwegian companies shows that protectionism has a strong significant effect on the level of perceived external export barriers. The cultural distance to the export markets has only a small effect, while the free trade agreement with the European Union has no effect.     

Explaining Firm Internationalization in Africa Using the Competence Approach

Abstract

The purpose of the study was to explore, through secondary research, the potential influence of the top management (key decision makers) of firms on the degree of internationalization of firms in sub-Saharan Africa.

More specifically, an attempt was made, firstly, to characterize the problem of low exports and low firm internationalization in Sub-Saharan Africa with a view to discussing the potential influence of the characteristics of key decision makers on firm internationalization. Secondly, to explore the competence theory and determine whether it could provide a viable analytical framework to facilitate future empirical investigations into the influence of key decision makers (top management) on firm internationalization focusing on sub-Saharan Africa.

Previous studies on firm internationalization from different parts of the world including Sub-Saharan Africa were examined. The characteristics and behaviors of top management reported to relate strongly to high levels of firm internationalization and export performance were extracted. The literature on competence then was examined with a view to obtaining theory that would be used to integrate the various managerial variables, which strongly related to high levels of firm internationalization.

The process of analysis and integration resulted into the development of the Competence Model of Firm Internationalization, which has been proposed. The analysis indicated that the top managers of firms had profound influence on the level and intensity of export activities mainly through the firms' production and marketing functions. The managerial implications of the findings and future research directions are discussed along with the limitations of the study.     

Firm heterogeneity and aggregate business services exports: Micro evidence from Belgium,France, Germany and Spain

This paper uses detailed micro data on services exports at the firm–destination–service level to analyse the role of firm heterogeneity in shaping aggregate services exports in Belgium, France, Germany and Spain from 2003 to 2007. We decompose the level and the growth of aggregate services exports into different trade margins paying special attention to firm heterogeneity within countries. We find that the weak export growth of France is at least partly due to poor performance by small exporters. By contrast, small exporters are the most dynamic contributors to the aggregate exports of Belgium, Germany and Spain. Our results highlight the importance of firm heterogeneity in understanding aggregate export growth.     

The Internet,Strategy and Performance: A Study of Australian Export Market Ventures

ABSTRACT

This study examines the impact of the Internet, firm-specific characteristics, market characteristics, and export marketing strategy on export marketing performance. The unit of analysis was an individual product/market export venture. Data were gathered via a self-administered mail survey of 315 Australian firms involved in exporting. The findings indicate that, when the Internet was used for communication purposes and to provide the firm with a competitive advantage, it had a significant impact on export marketing performance. Firm-specific characteristics and export marketing strategy also had a significant impact on export marketing performance.     

The export propensity of Turkish manufacturing and trading house firms∗

A substantial amount of research has been carried out on the export marketing behaviour of firms during the last twenty years. However, most of these studies have looked at the export behaviour of firms in a developed country. The present study examines the export orientation of Turkish manufacturing and trading house firms and tries to differentiate these two types of firms in terms of their export drives. The findings of this study may be applicable to other developing countries which are at a level of economic development similar to that of Turkey.     

The Exporter Wage Premium Hypothesis: An Unconditional Quantile Regression and Decomposition Approach

ABSTRACT

Relying on the World Bank Enterprise Survey dataset in 2012/13, this paper applies the unconditional quantile regression and decomposition estimation techniques to examine the hypothesis that workers in exporting firms receive higher wages than those in non-exporting firms. The results show that the relationship between export and firm’s wage bill is indirect and is transmitted through technology and firm size. Remarkably, these indirect relationships are much more pronounced at the more upper quantiles of the wage bill distribution. However, the net relationships of the interaction between export and technology are relatively larger and positive as compared to that of the interaction between export and firm size which are marginal and mixed. The decomposition analysis indicates that much of the present exporter wage premiums are largely due to the differences in the returns to the characteristics between exporting and non-exporting firms. The findings from this paper suggest directions for future work that can be directly useful for policy.     

Are Exporters More Likely to Introduce Product Innovations?

A firm’s export status may improve its ability to introduce product innovations (learning by exporting). We explore this idea using very rich firm‐level data on Italian manufacturing, which enables us to control for many confounding factors in the exporting–product innovation link (i.e. selection on observable variables). We also make an attempt to address the potential self‐selection of firms into exporting according to unobservable characteristics using an industry–province specific measure of firm distances from their most likely export markets, and of these export markets’ potentials as sources of presumably exogenous variations in export status using an instrumental variables strategy. We find that export status significantly increases the likelihood of introducing product innovations and that this effect is not fully captured by the channels commonly stressed by the theoretical literature, such as larger markets (and accordingly firm size) or higher investments in R&D. We argue that heterogeneity in foreign customers’ tastes and needs may explain our findings.     

Promoting Awareness of Government Export Assistance Programs in the International Marketing Course

ABSTRACT

One of the features of international marketing which distinguishes it from purely domestic marketing is the role of government-sponsored programs in helping firms start and indeed succeed in overseas markets. There is evidence that American firms make much less use of these programs than their foreign competitors. One possible contributing factor to this situation is limited classroom coverage which American instructors of international marketing devote to this area.

Two hundred and six U.S.-based members of the Academy of International Business (A.I.B.) were surveyed. Results indicated that while instructors of international marketing feel that government export assistance programs are important for export sucess, they are not very familiar with most of these programs and do not have positive perceptives about the quality of services currently offered. Little class time is devoted to most of the programs and lecture remains the dominant pedagogical tool. The connection between instructor familiarity with these programs and perceived importance and quality is also addressed.     

Market‐specific Sunk Export Costs: The Impact of Learning and Spillovers

Firms may face sunk costs when entering an export market. Previous studies have focused on global or country‐specific sunk export costs. This study analyses the importance of market‐specific sunk export costs (defining ‘market’ as a product–country combination). We also study how market‐specific export costs can be affected by various kinds of learning and spillover effects. We use firm‐level panel data for Norwegian seafood exports distributed on products and countries. The results lend support to the hypothesis of market‐specific sunk costs. We also find evidence of learning and spillover effects, particularly within the same product group.     

Optimal trade,industrial, and privatization policies in a mixed duopoly with strategic managerial incentives

Abstract

This paper examines optimal trade, industrial, and privatization policies in a home-market model of mixed international duopoly with strategic managerial incentives. Under linear demand and constant marginal costs, the optimal degree of privatization is shown to depend crucially on cost and demand parameters and on the availability of strategic trade and industrial policies. If both firms are equally efficient, optimal trade and industrial policies drive out the foreign firm and the privatization policy loses its effect on national welfare; however, if the home firm is less efficient, then full privatization combined with an import tariff and a production subsidy is optimal for the home country, while an export subsidy is optimal for the foreign country. If trade and industrial policies are unavailable and if both firms are equally efficient, full state-ownership, which drives out the foreign firm, becomes optimal; however, if the home firm is less efficient, only partial privatization is optimal, The state-ownership share is increased if either the market size grows, the home firm's efficiency increases, or the foreign firm's efficiency decreases. Further, the paper demonstrates the potential conflict between privatization and trade liberalization policies.     

Profiling exporting and nonexporting service firms: Critical differences to decision-makers

The internationalization of services has become a critical element in the global marketplace. While the internationalization of services has increased in importance, the lack of empirically based research has been a shortcoming. This article empirically examines key characteristics (i.e., total sales, number of employees, age of firm, management's desire to export, perceived profit potential from internationalization, top management's foreign language skills, and international work experience) separating exporting from nonexporting domestic-based service firms. It provides a profile for the exporting service firm that is distinctly different than that of the nonexporting service provider. These differences suggest important policy considerations for federal and state export promotion agencies and strategy considerations for service firm owners and management. © 1999 John Wiley & Sons, Inc.     

Psychological contracts and independent sales contractors: an examination of the predictors of contractor-level outcomes

Abstract

Over the past decade, the independent sales contractor (ISC) has emerged as both an important distribution channel and a management challenge. This study makes two contributions to this evolving field. First, it explores the interrelations of the psychological contract with sales performance, voluntary turnover and organisational advocacy of ISCs, which have hitherto been largely unexplored. Second, it examines differences between high- and low-performing sales contractors on these linkages, due to findings in the literature that a small number of sales contractors often achieve a majority of sales. Based on survey data as well as 7 years of contractor-level data related to sales performance and voluntary turnover (n = 189), results indicate that psychological contract fulfilment and perceived dependency are important determinants of subsequent sales performance, voluntary turnover and organisational advocacy, with significant differences reported between high- and low-performing ISCs. A notable finding pertinent for sales managers responsible for managing ISCs is that high-performing sales contractors are motivated by psychological contract fulfilment and a low perception of dependency, while low-performing sales contractors are more likely to act as advocates for the firm due to perceived dependency, but may concurrently engage in organisational advocacy as a means to leave the firm.     

Using emotional benefits as a differentiation strategy in saturated markets

The high level of product substitution in most consumer markets often makes it difficult to match supply with demand, especially in sectors with mature, saturated markets with intense competition and a high degree of product differentiation. The difficulty of using technical characteristics such as quality and/or price to differentiate products suggests that marketers could profit from gaining more insight into the way in which consumers' purchase decisions are influenced by their perceived emotions. This paper investigates this issue in the wine market, a highly saturated market with homogeneous supply, obtaining results that appear to support the notion that emotions do indeed play a part in consumer choice structures, which show a higher degree of abstraction in those segments that report a greater number of perceived emotions. This considerably complicates the task of creating a differentiated marketing strategy, in the sense that suppliers need to give much greater consideration to consumers' self‐awareness. © 2009 Wiley Periodicals, Inc.