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.     

External environment and the moderating role of export market orientation

This research has two main objectives. The first is to fill the knowledge gap on the role which the external environment plays in the strategic behavior of exporting companies, taking into account the psychological distances between the domestic and foreign markets. The second aim is to clarify the role that market orientation plays in export activity, since the literature review shows conflicting results. The study provides insight into these issues through hypothesis testing of a conceptual model using a sample of 212 Spanish exporting companies. The results lead to two major conclusions: (a) in turbulent environments, exporting firms adapting the marketing mix program to the needs of foreign markets obtain a better export performance in highly competitive and psychologically distant markets; (b) although market orientation has a direct and positive effect on export performance, its main role is to support strategic decision making in exporting companies. In addition, market orientation moderates the relationship between marketing mix adaptation and export performance.     

Export planning orientation and its antecedents: Evidence from exporting IT products

There is strong support in the export literature for a positive relationship between export planning and export performance. However, little is known about the drivers of export planning. In addressing this knowledge gap, this article proposes that export planning is usefully analyzed in terms of a managerial orientation. Regarding the antecedents of export planning orientation, the focus here is on the role of factors internal to the firm, especially its exporting mindset (export necessity and export commitment). This article also examines to what extent export confidence (psychic distance and marketing advantage) moderates the relationship. The empirical results show that export commitment has a strong and positive effect on a firm's export planning orientation. This relationship is moderated by psychic distance and marketing advantage. Specifically, the results show that the greater the psychic distance and the weaker the marketing advantage, the stronger the relationship between export commitment and a firm's export planning orientation. The results also show that management's perceived export necessity has a negative effect on a firm's export planning orientation and that this relationship remains unaffected by psychic distance and marketing advantage.     

Implications of Firm Controllable Factors on Export Growth

The need to stimulate export activity of U.S. companies has motivated research on export behavior of firms. Based on the strategic export model, this study attempts to investigate firm controllable factors that stimulate export growth. A survey of 640 small and medium sized manufacturing firms engaged in exporting showed that having a high commitment to exporting, having a possitive attitude toward exporting by placing less importance on perceived barriers to exporting (or export growth), having a customized product adaptation policy and willingness to modify the product, and seeking outside export assistance contribute to export success measured by export growth. International market expansion strategy did not seem to be associate with export growth.     

An Analysis of the Barriers Hindering Small Business Export Development

Notwithstanding the benefits derived from exporting in an increasingly globalized marketplace, for many smaller-sized manufacturers the internationalization path is beset by numerous obstacles. This article offers a comprehensive analysis of 39 export barriers extracted from a systematic review of 32 empirical studies conducted on the subject. These have been classified into internal (incorporating informational, functional, and marketing) and external (comprising procedural, governmental, task, and environmental) barriers. The impact of export barriers is shown to be situation-specific, largely depending on the idiosyncratic managerial, organizational, and environmental background of the firm. However, certain barriers, such as those relating to information inefficiencies, price competitiveness, foreign customer habits, and politicoeconomic hurdles, seem to have a systematically strong obstructing effect on export behavior. Several conclusions and implications for small business managers, public policymakers, business educators, and exporting researchers are derived.     

Financial Constraints and Small and Medium-Sized Firms’ Export Propensity: Evidence from Portuguese Manufacturing Firms

The internationalization of firms through exports is often crucial to their survival and growth in this era of globalization. This is particularly the case for small and medium-sized enterprises (SMEs) operating in small and saturated markets, as is the case in Portugal. However, firms face several barriers to exporting, and this study aims to verify whether financial constraints influence a firm’s export propensity. The empirical analysis is based on a sample of 12,732 Portuguese manufacturing SMEs during the period 2008–2012, and tests two different proxies of financial constraints: the liquidity and leverage ratios. The results indicate that the SMEs in less healthy financial positions are less likely to export than the others are, although the impact of financial constraints on these Portuguese firms appears to be relatively small.     

The empirical link between export dispersion and export performance: A contingency-based approach

Practitioners and scholars point out that firms are increasingly dispersing their capabilities across organizational functions. However, it is not clear whether all forms of dispersion, of any function, result in the same consequences. This study initiates investigation into the link between the cross-functional dispersion of influence on export marketing decisions (export dispersion) and export performance. Drawing on data from a sample of 225 UK exporters, the findings support the argument that active participation of non-export functions in export-marketing decisions affects export success. However, those performance consequences are dependent on internal and external contingencies. Export dispersion is beneficial for export performance when the export customer environment is more turbulent and, simultaneously, the export technological environment is more stable and the firm has lower levels of export information sharing. In all other scenarios examined in this study, greater levels of concentration of export decision-making (i.e. lower levels of export dispersion) appear to be more beneficial for export performance. Our findings imply that the management of the firm’s level of export dispersion is a complex task, whereby the degree of export dispersion pursued needs to match external environmental and internal firm factors.     

Does external technology acquisition determine export performance? Evidence from Chinese manufacturing firms

Although technology profile has been one of the key determinants of firms’ export performance in the international business literature, most research has focused on only the role of internal technology efforts rather than the role of external technology. This study thus aims to extend our understanding of the determinants of export performance by examining the impact of the inter-organizational dimension of innovation strategy to export performance, which has been ignored in the prevailing “strategy tripod” perspective of exporting research. This study is based on a sample of 141 Chinese indigenous manufacturing firms that engaged in inward technology licensing between 2000 and 2003. The empirical results indicate that external technology acquisitions positively influence Chinese firms’ export performance. Moreover the exporting performance of using external technology varies depending on the their sources (domestic and foreign). The exporting firms that acquired technology from foreign countries outperformed those relied on domestically developed technology.     

Rigidity in SME export commencement decisions

In an increasingly globalised world, firms generally have become more internationalised utilising a range of different modes of operation. In the case of small-medium sized enterprises (SMEs), exporting is the favoured mode of international market entry, at least in the early stages of internationalisation, and many governments have supported SME exports through export promotion policies because of the importance of SMEs in employment creation. However, in spite of this policy focus, in most countries, the proportional involvement of SMEs in exporting remains low, which raises an important question as to what factors are inhibiting firms that are successful domestically from exporting. In addressing this question, much scholarly research has focused on the broad concept of ‘export barriers’. These barriers, for example, tariffs, quotas and administrative obstacles, are seen as a primary source of export reluctance. This paper takes a different approach to previous studies and proposes that a firm's resistance to exporting can be better understood through an analysis of the behavioural decision process of firms in line with the Uppsala internationalisation model. We propose ‘lateral rigidity’, first introduced in the literature in the 1970s, as an important concept in export commencement. By applying factor analysis to a survey of Australian SMEs, we provide a measurement model for lateral rigidity, revealing its important factors and thus strengthening understanding of firms' export commencement decisions. We conclude by drawing implications for internationalisation theory, practice and public policy and suggesting ways to extend this work through future research.     

Exporting barriers: Insights from Portuguese small- and medium-sized exporters and non-exporters

This study aimed to identify some of the major barriers that may hinder potential exporters and non-exporters from exporting their operations. Both parametric and semi-parametric binary choice models were used to analyze the data with the aim of assessing which of the major barriers detected can better explain the surveyed SMEs' decision to export or not. Six out of the 23 distinct barriers defined initially in the survey were found as statistically significant determiners of the probability that a surveyed SME firm would be a non-exporter. If public agents are interested in promoting and implementing the most effective mechanisms to stimulate exporting of domestic firms, several policy measures are advisable in order to minimize or alleviate the perceived inhibiting impact of barriers on SME firms' exporting decisions. In summary, results from the study revealed that non-exporters consider the lack of knowledge of potential markets, lack of qualified export personnel, lack of technical suitability, degree of competition in the sector, lack of financial assistance (governmental and financial institutions), and lack of qualified human resources as the main export barriers. By comparison, exporters perceived warehousing and control of the physical product flow in the target market to be the biggest barrier.     

Ghanaian exporters’ international experience and performance: the mediating role of export commitment

The existing literature provides mixed findings regarding the impact of international experience on export performance. One of the reasons for these mixed findings could be the intervening mechanisms that influence international experience – export performance relationships. We examine one factor, namely export commitment. Drawing from the resource-based view, we examine how the interaction between international experience and export commitment enhances export performance. Based on a sample of 116 Ghanaian exporting firms, the findings suggest that export commitment significantly mediates the association between international experience and export performance. We make two key contributions: first, we provide understanding of how international experience contributes to export performance – through enhancing export commitment. Second, we provide evidence from an under researched geographical context, namely Ghana. Thus, we extend the existing literature to sub-Saharan African countries.     

What is beneficial for first-time SME-exporters from a transition economy: A diversified or a focused export-strategy?

We examine whether more focused or more diversified exporting is beneficial for first-time SME-exporters from a small European transition economy (TE). We test the impact of market (geographic) diversification, product diversification and export intensity (export volume) on firm performance. In addition, we test whether a complex export strategy – of simultaneous product- and market-diversification – is beneficial for TE SMEs. We use panel data of all reported, first-time Slovenian exporters in the period 1995–2010. We find that a diversified export strategy in terms of product, market and intensity is positively related to performance although with decreasing returns. Furthermore, a complex diversification strategy pays off for first time TE SME-exporters, but in a decreasing fashion.     

Geography,knowledge spillovers and small firms’ exports: an empirical examination for The Netherlands

This study examines the impact of external and internal scale economies on the decision to start exporting and the level of exports of innovating firms. Based on new trade theory, increasing returns to scale—both internal and external scale economies—are considered an important source of comparative and competitive advantage. The empirical analysis of (small) innovating firms in The Netherlands leads to two main findings. First, firms that are located in technical Marshallian clusters seem less inclined to become exporters. Availability of technical knowledge alone does not help to reduce entry costs that come with the decision to export and/or marketing and sales costs in order to achieve a higher export performance. Second, firms that experience difficulties in appropriating innovation rents due to labour poaching also seem to be less inclined to become exporters. The explanation for this second finding is the importance of outgoing knowledge spillovers, which is particularly relevant for small, product innovating firms. This reduces their probability to export. However, if firms export, the knowledge leaking argument is not valid for the export performance of the firm.     

Export strategy,export intensity and learning: Integrating the resource perspective and institutional perspective

Export intensity (EI) has been widely examined as a performance outcome of exporting firms. To date, studies on the determinants of EI have generated mixed and even contradictory results. To reconcile such inconsistencies, this study dichotomizes export strategy in emerging economies into two distinctive types, expansion-oriented vs. escape-oriented, with the former inspired by exploiting firm-specific competencies as portrayed by the RBV and the latter motivated by avoiding the domestic institutional deficiencies as informed by the institutional perspective. Different from prior findings in the International Business literature, this research finds that a firm’s extremely high EI might not result from their superior competencies. Instead, high EI firms might focus on export mainly for the purpose of escaping from their home country’s deficient institutional environment that places extra burdens in terms of costs of doing business. Such escape-oriented exporters are more sensitive and responsive to changes in the environment while they do not enhance their learning as much as those expansion-oriented exporters. Furthermore, institutional environment has heterogeneous impacts on firms with different ownership types. Our study helps integrate the insights from both the RBV and the institutional perspective, and our dichotomization of export strategy adds precision and sophistication to the understanding of EI and export performance. Our hypotheses are supported by an empirical study based on a sample of exporting firms in China between 1998 and 2007.     

Innovation capacity,international experience and export performance of SMEs in Brazil

Innovation capacity and international experience are factors often related to the internationalisation process of firms, with export activities as the first stage of the process. However, firms from emerging countries seem to show advantages and follow patterns of international expansion that may differ from firms based in developed countries, where the internationalisation models were created. Specifically, exporting firms from emerging countries tend to have limited resources, especially small firms (e.g., for investing in R&D). Despite these facts, the literature on export performance seems biased towards recommending firms to enhance, above all, their innovation capacity in order to achieve better export performance, while little attention is paid to international experience as a factor that is as important as innovation. In this context, the objective of this study is to investigate the impact of innovation capacity and international experience on the export performance of small and medium-sized enterprises (SMEs) located in an emerging country and to identify which factor is more significant. The Resource-Based View and Dynamic Capabilities approach were used as theoretical frameworks. A research model was developed and tested on a significant sample of Brazilian industrial SMEs. The data were analysed through partial least squares structural equation modelling. The results indicate that international experience has a greater impact on export performance than innovation capacity, showing that there is possibility of overemphasising the role of innovation in the export performance of SMEs, at least, in the Brazilian context.     

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.     

What makes a successful exporter? An introduction

The papers in this issue continue with the tradition of adding puzzles pieces to the overall picture of the impact and importance of firm international activities. In "What makes a successful exporter?", we have collected twelve papers, the majority of which were presented at the 13th annual ISGEP workshop in Ljubljana, Slovenia on 20–21 September 2018. The common thread linking these papers is that they explore both what it means to be an exporter and the ramifications of exporting on firms and the economy as a whole. On the one hand, this special issue addresses the role of foreign sourcing, export experience in the board of directors and credit supply shocks on the propensity to export, as well as the factors that affect firms' overall readiness to export. On the other hand, it investigates various measures of performance in the export markets, such as export duration, markups, quality upgrading and product mix.     

Do barriers to export vary for born globals and across stages of internationalization? An empirical inquiry in the emerging market of Turkey

Although the literature on export barriers has been growing, this issue of whether barriers to export exhibit significant differences among firms has not been addressed. In particular, the question of whether these impediments are uniform for born globals – a new breed of exporting firms that initiate exporting soon after inception – is unresolved. Similarly, barriers to export are thought to vary across different stages of internationalization. Therefore, the present work explores this fundamental issue. The empirical study is carried out in the context of an emerging market, Turkey, providing an opportunity for examining the stability of earlier findings (carried out largely in advanced economy settings) for rapidly developing economies. Results suggest that perceived barriers differ mainly for firms in the domestic marketing stage, pre-export stage and for born global firms.     

Do falling iceberg costs explain recent U.S. export growth?

We study empirically and theoretically the growth of U.S. manufacturing exports from 1987 to 2007. We use plant-level data on exporters' export intensity to identify the changes in iceberg costs over this period. Given this change in iceberg costs, we find that a GE model with heterogeneous establishments and dynamic exporting decision from a sunk cost of starting to export is consistent with both aggregate U.S. export growth and the changes in the number and size of U.S. exporters. The model also captures the gradual response of U.S. exports to the cut in iceberg costs. A model with a static exporting decision generates substantially less trade growth and misses out on the timing of export growth. We also study the interplay between changes in the structure of manufacturing and trade. We find that the growth in trade contributed little to the contraction in U.S. manufacturing while changes in the structure of manufacturing from changes in sectoral productivity, capital intensity, idiosyncratic shocks, and corporate taxation reduced U.S. export growth by as much as 10%.     

A review of the empirical research on export channel selection between 1979 and 2015

Export channel selection is an important strategy for exporting firms. Over the last 45 years, there have been a number of studies investigating the antecedents and outcomes of this strategy. However, no single study systematically reviews the findings in this field. In order to address this gap, we review the literature on export channel selection up to 2015 and analyse findings on the determinants and/or consequences of export channel selection. Our review shows that in general export channel selection remains underexplored. We identify a number of issues in the current studies, including lacking knowledge of performance implication of channel selection, missing theoretical bases, weaknesses of research methods. Based on these, this review provides future research directions for development in export channel selection research.