The role of international design orientation and market intelligence in the export performance of US machine tool companies

This paper looks at the role of product design in the export performance of US manufacturing firms in the machine tool (MT) industry. Evidence from a survey of 173 MT companies points to stronger export results among firms that initiate the design process with respect to the needs of foreign buyers. In contrast, firms that enter foreign markets with products that were originally designed for domestic clients typically exhibit weaker export sales. Firms in the latter category spend less on market intelligence than their more internationally-oriented counterparts. For both groups of firms, however, a common finding is that recent interest in export expansion has been driven by rising import penetration (loss of domestic market share). The paper concludes with a brief discussion of the implications of the empirical results for future research on export marketing.