The Impact of Changes in the Political and Economic Environment on Foreign Direct Investment Opportunities in Romania

Abstract

This study reports findings of a survey including 139 Finnish and 97 Austrian companies active in Eastern Europe. The study focuses on two major areas in the firm's business activities in Eastern Europe, namely on market strategies-the timing of market entry, market selection, entry modes and motives-and company performance. The number of market entries has increased after the transition, but the majority of business activities still take place in geographically-close countries. Companies have gradually started to use more high-commitment modes of operation, but contrary to our expectations, high commitment modes were also frequently used in more unstable markets. Company performance in Russia and especially in other countries of Eastern Europe was in general clearly lower than in domestic markets and foreign markets in general. Against expectations, firm size, dependence on international markets, length of operation, and mode of operation in Eastern Europe did not significantly influence the performance. However, firms which concentrated on Russian markets on a continuous basis performed much better than other firms.     

Pass-Through Elasticity,Substitution and Market Share: the Case for Sheep Meat Exports

This paper empirically examines the exchange rate pass-through elasticity, using sheep meat exports from the two major exporters, Australia and New Zealand. The results show the coexistence of incomplete and complete pass-through in the international sheep meat industry. The Australian sheep meat exporters have a relatively smaller market share than New Zealand and are not able to exercise monopoly power. New Zealand producers, on the other hand, can increase their mark-ups in those destination countries where they have a large market share.     

Export performance of small firms from small countries: The case of New Zealand

Drawing on traditional models of multinational expansion and organisational learning, Brouthers et al. (J Int Mark 17:21–38, 2009) prescribe that in some circumstances, small firms exporting from small countries should concentrate their exports into a single overseas market. These particular circumstances pertain to small Greek and Caribbean exporters in mature low-technology industries. This research extends this 2009 study to the same size group of small firms in another small country, New Zealand. Model estimation involved multiple regression methods on survey data from 249 small New Zealand exporters. Contrasting with Brouthers et al.’s advice, this study finds that small New Zealand exporters should not concentrate their exports into one or a few overseas markets. Success for these small firms stemmed from higher rates of R&D expenditure and multi-market exporting through company-owned channels in distant markets. These differences reflect the different environments and sample characteristics between the two studies. The paper contextualises further the evidence base on the strategies that small firm owner-managers should pursue and policy makers should promote.     

Effects of Trade Barrier Perception on International Services Trade

Abstract

While the United States is the world's largest exporter of business services, barriers erected by foreign governments seem to have severely depressed the penetration of insurance services in some of the world's largest markets.

Previous studies of the effects of barriers have concentrated on exporters of goods rather than services. Some of these studies conclude that foreign government restrictions are a major concern for exporters while others find that exporters perceive these barriers as less important.

The present study focuses on the effect of executives perceptions of trade barriers on their actions. Those who chose not to enter particular markets did not perceive these markets as more difficult to enter than all respondents did. Managers planned and took the most actions in the market perceived to be the least difficult to enter but results for other countries did not correlate with the perception of entry difficulty.     

Barriers to Internationalisation: A Study of Entrepreneurial New Ventures in New Zealand

This paper presents the findings of a study of the perceptions of the barriers to internationalisation by 561 New Zealand Entrepreneurial New Ventures (ENVs). Significant differences in the perception of the barriers are identified according to the level of international activity of New Zealand ENVs. Exporters and likely exporters consider the main barriers to internationalisation to be finance and cost-related factors. A lack of New Zealand government incentives are also seen to be major barriers for these two groups with likely exporters also perceiving their lack of international experience to be a hindrance. By comparison non-exporters perceive firm size to be the biggest barrier to internationalisation followed by a lack of market knowledge and experience. Industry was found to have no influence on the perception of barriers to internationalisation, however, firm size does have an impact.     

Internationalization of Japanese Multinational Corporations in Central and Eastern Europe

Abstract

The paper focuses on the internationalization activities of Japanese MNCs in Central and Eastern Europe (CEE) analyzing data on national level considering Japan's modes of market entry in the CEE region and some of the countries in it. Major trends and the development of Japanese internationalization in CEE are presented. Individual mini case studies contribute to the analysis using the experience of several major Japanese MNCs that have invested in the region. The goal of the paper is to uncover the specifics of the internationalization process of Japanese corporations in the CEE region. Main characteristics of the penetration of Japanese MNCs in CEE are unveiled and discussed in the concluding part of the paper. The management implications and conclusions from the study are discussed further in the final part of the paper.     

An Empirical Investigation of Marketing Programme and Process Elements in the Home-Host Scenario

SUMMARY

The two major strategies often available to international marketers are standardisation and adaptation when deciding to operate in a foreign host market. Both strategies have pros and cons. Drawing on the findings of previous theoretical and empirical studies, this study proposes a “marketing programme/process and performance” framework. The study employed a linear multiple regression (OLS) analysis method to examine the proposed framework, based on the experience of 233 Australian and New Zealand (home markets) firms operating in the Greater China region (host markets). Factors identified as significantly associated with adaptation of programme/process include “employee” and “employer” immigrant effects, government regulations, economic development, competitive environment and product life cycle. Factors identified as influencing firm performance include product adaptation, product type and market entry mode.     

The Role of the Internet in the Delivery of Export Promotion Services: A Web Site Content Analysis

ABSTRACT

This article examines the role of the Internet in the delivery of export promotion services. Based on a content analysis of the Web sites of 250 export promotion organizations (EPOs) representing over 130 countries, it is concluded that the majority of these organizations have not fully exploited the potentials of this technology in the delivery of support services to national exporters. Use of the Internet is primarily limited to dissemination of basic information with little effort made to utilize the interactive and customization features of the technology. The managerial and policy implications of this failure in terms of increased cost of market entry, lost export revenues, and exporter attrition are discussed.     

Learning Styles

Abstract

The purpose of this paper is to describe an assessment instrument that college professors can use to identify their own teaching strategies as well as to help their students become more aware of their own learning strategies and motivation for learning. The learning styles of students in two different sections of business-economics courses at Marshall University (MU), Huntington, West Virginia, and Auckland Institute of Technology (AIT), Auckland, New Zealand are determined via the use of the VARK instrument. The information generated by the instrument informs about the general cognitive and motivational characteristics of their students. This information in turn can be used in course planning and teaching. The achievement of college students could be improved by providing instruction in a manner consistent with each student's learning style. The VARK instrument could provide both students and educators in the countries of Central and Eastern Europe with a stimulus for reflection and a change in both learning and teaching methods.     

Brand image,cultural association and marketing: ‘New Zealand’ butter and lamb exports to Britain,c. 1920–1938

Abstract

This article examines the branding and marketing strategies of New Zealand Producers Boards which were established in the early 1920s to coordinate the export of butter and lamb to Britain. The brand ‘New Zealand’ featured prominently in the promotion of lamb exports to Britain, whereas much more emphasis was placed on the ‘Anchor’ brand for butter. Because the ‘Mother Country’ was by far the biggest single export market for New Zealand butter and lamb, the branding and marketing activities of the Boards emphasised the strong cultural affinity that existed between Britain and New Zealand. Drawing on the relevant branding and marketing literature, the Boards’ annual reports, and reports by the Ministry of Agriculture and Fisheries, we show that ‘New Zealand’ and ‘Anchor’ conveyed the fundamental message of a shared British identity.     

Indirect Exporters

Indirect exporters are defined as firms exporting through a trade intermediary. These firms have received rapidly expanding empirical and theoretical attention recently. I show that in Eastern Europe and Central Asia these firms do, as predicted by the theoretical literature, lie between domestic firms and direct exporters for a range of performance measures. Multi-product firms, despite their generally higher productivity, are shown to be more likely to use intermediaries than single-product firms, suggesting that “mixed exporting strategies” that use intermediaries are important for these firms. Analysis using a small panel subsample of the data suggests the sunk costs of indirect exporting are significantly lower than those for direct exporting, pointing to a role for intermediaries in “greasing the wheel” of entry to export markets.     

Learning to export: Export growth and the destination decision of firms

I find evidence that the geographic expansion of firm exports occurs slowly over time and that a large share of export growth is due to incumbent exporters entering new destinations. New exporters enter large countries and destinations with characteristics similar to their domestic market. Less similar, distant or less developed countries are entered by firms already exporting to other destinations. I formulate a dynamic general equilibrium model to test if these patterns are due to firms learning how to export (as other recent empirical findings have suggested) or other factors considered in the literature. In this model, heterogeneous firms experience learning in the form of market entry costs that depend on export history. Using Russian firm level data, I find that learning plays a significant role in explaining the observed entry patterns, which standard trade models cannot account for.     

Determination of Export Channel Strategies–The Experience of New Zealand Firms

ABSTRACT

There are many issues which need to be considered when businesses decide to internationalise their operations. One of the issues is the choice of export channels. The choice of export channels has a decisive impact on a firm's international marketing program. Export channel decisions are well researched in many countries However little attention has been made to investigate the choice of export channels by New Zealand international marketers This study examines the factors influencing the choice of export channels of 115 New Zealand firms conducting business with Taiwan. The results suggest that marketer's choice of export channels is influenced by the host market's business system, market size of the industry in the host market, and the degree of produce differentiation. The host market's business system is revealed for the first time to be a factor influencing the choice of export channels.     

Paths to foreign markets: Does distance to market affect firm internationalisation?

An idea widely shared among international business scholars, economists and geographers is that geographic, cultural and psychic distance to market affects firm internationalisation in a number of ways. However, evidence for this broad proposition remains inconclusive. This study provides a comprehensive assessment of four separate hypotheses pertaining to the location of markets, the sequence of market entry, the rate of international expansion, and the relationship between sequentially-linked markets. In contrast with previous studies, the analysis is based on a large sample of non-repetitive foreign market entries (n=1132) made by diverse exporters in dissimilar locations within a single country (China). Market entry data thus exhibit substantial variation on the constructs of interest. The results reveal virtually no support for three traditional hypotheses linking distance to market with the sequence of markets entered and the rate of foreign expansion. This study challenges the long-held notion that there is a simple link between distance and market entry sequence. However, this study provides arguably the first demonstration of the “near-market effect” in the context of low-risk entry modes such as exporting. Specifically, the results show that consecutive export locations tend to be culturally related suggesting that exporters are able to transfer learning between similar markets.     

Export Premium,Self‐selection and Learning‐by‐Exporting: Evidence from Chinese Matched Firms

This study empirically focuses on examining the hypotheses of export premium (exporters are more productive than non‐exporters), selection‐into‐exporting (more productive firms are ones that tend to become exporters) and learning‐by‐exporting (new export market entrants have higher productivity growth than non‐exporters in the post‐entry period). The propensity score matching method is used to adjust for observable differences of firm characteristics between exporters and non‐exporters, allowing an adequate ‘like‐for‐like’ comparison. We also use the difference‐in‐difference matching estimator to capture the magnitude of different productivity growth between matched new export market entrants and non‐exporters in the post‐entry period up to two years. Drawing on 2,340 Chinese firms in the period 2000–02, we find evidence for export premium and self‐selection, and once the firm has entered the export market there is additional productivity growth from the learning effect, in particular in the second year after entry.     

The Relative Impact of Market Orientation and Entrepreneurship on Export Performance: Do We Really Know Enough?

ABSTRACT

The impact of international corporate entrepreneurship and market orientation on firm performance is well acknowledged in the literature, but their relative influence on the performance of exporting firms remains inconclusive. This study seeks to help clarify the influence of these organizational resources by introducing a third complementary resource, namely commitment to learning. The results, based on data obtained from a survey of exporters in China, show that commitment to learning mediates the relationship between market orientation and entrepreneurship. It was also found that market orientation could be a double-edged sword for exporters in that it can enhance export satisfaction through entrepreneurship, but it can also have negative impact on profit.     

Collaborative Learning Instrument in Teaching Entrepreneurship Issues

Abstract

Due to the shortcomings associated with the largely passive learning experience currently experienced by students at the University level in Central and Eastern Europe, active learning approaches have been promoted by educationalists as a more effective method for teaching business and entrepreneurship. This paper contributes to this literature by outlining a collaborative learning instrument involving active learning that can be used to teach entrepreneurship at university level in Central and Eastern Europe. This instrument illustrates the role of entrepreneurship and proprietorship in both a well-established market economy and in the post-communist economies of Central and Eastern Europe. Students outcomes should include the following: firstly, the recognition that the emerging small business sectors of the post-communist economies have much potential as a vehicle for economic growth and for developing capitalist forms of economic production; secondly, an understanding that entrepreneurial behavior is an essential element in the development of the small business sector; thirdly, an ability to identify traits common to successful entrepreneurs; and fourthly, they will develop and practice a variety of entrepreneurial skills themselves that may make them aware of their potential as entrepreneurs.     

Influence of International Trade Agreements on International Business: A Conceptual Model

The article provides a conceptual model, developed from analyzing over fifty trade agreement related research studies published during the last decade, which allows international business scholars to explore the influence of trade agreements (custom unions, free trade agreements, preferential trade agreements, regional trade agreements) on foreign market entry strategies. This model is an attempt to develop IB theory to address the current research gap in this very narrow but important allied field. Empirical findings generated by interviewing dairy produce exporters in New Zealand reveal a remarkable connection between TAs and IB, with TAs found to influence the regulative environment of participating countries, which may in turn reduce the regulative distance between member nations. The contribution provides a basis for IB researchers to explore this connection in multiple industries/countries.     

The Strategic Importance of Retail Investment in Asia and Its Implications for the Metro Group in Asia

Abstract

The speed, intensity and reach of retailers' foreign expansion are rising. As more distant markets have to be chosen to stay competitive, the pressure to expand abroad is increasing. Often, changing or stretching the initial business model in order to comply with local market demand maintains the performance of the firm. This phenomenon of strategy alteration after market entry is examined, using the Metro Cash and Carry expansion into Asia as an example. First, the investment attractiveness of Asia as a region is examined. Second, there is a review of countries in Asia that are especially considered for business expansion. Finally, the question of how an overall internationalisation strategy or business concept of a company changes after market entry into Asia is explored.