Management Influences on Export Performance: A Review of the Empirical Literature 1978‐1988

Management Influences on Export

Performance: A Review 1978-1988

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Management Influences on Export Performance: A Review of the Empirical Literature 1978-88

by Nils-Erik Aaby and Stanley F. Slater

University of Colorado, Colorado Springs

Exploration into the determinants of export performance has been an important stream of international marketing research for well over 20 years. If anything, this importance has increased substantially in the past five years as global markets for many products have emerged and competition from foreign sellers has increased. Unfortunately, much of the knowledge regarding successful export practice is fragmented. This is largely because there has been no comprehensive review and synthesis of the export literature since Bilkey's (1978) work. This article attempts to correct that deficiency by describing an integrative model of export performance and classifying the results of the past decade's export research according to the parameters of the model.

Czinkota and Johnston (1982, 1983) argued that the current predicament of US export trade has been preceded by a crisis in export research. Current export research is balkanised; knowledge on how to make firms effective exporters is underdeveloped. Present export inquiry consists of a "mosaic" of autonomous endeavours. There have been few efforts to consolidate empirical export research into a consistent conceptual structure. To date, the most recent and comprehensive review of the export management literature was conducted by Bilkey (1978). He reviewed 43 studies on export behaviour of firms from eleven countries. While he found consistency among the findings regarding several dimensions of export behaviour, findings on other dimensions were in conflict. Table I contains a brief recap of the results of Bilkey's review.

A "Strategic Export Model" In order to organise and focus export research efforts we argue that current export knowledge should be synthesised at two broad levels — the external environment level, and the firm business strategy and functional level. The environmental level includes macro-economic, social, physical, cultural, and political aspects which influence export management, behaviour and performance. The individual exporter can only to a very limited extent influence this environment, and in most situations must consider the macro-parameters as given constraints. The business strategy level includes assessment of key business policies and capabilities within the

Received July 1988 Revised December 1988

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Table I. Summary Findings from Bilkey's (1978) Review of the Literature on Export Performance

• The importance of a profit motivation for export behaviour is unclear. • Non-exporters who have explored export opportunities perceive greater obstacles

to exporting than do exporting firms. • The most frequently mentioned obstacles are insufficient finances, foreign

government restrictions, insufficient knowledge about foreign selling opportunities, inadequate product distribution abroad, and a lack of foreign connections.

• Exporting firms tend to have better management than non-exporting firms. • Very small firms tend not to export; beyond some point exporting is not correlated

with size, but between those two points exporting is correlated with size. There is a possibility of an inter-correlation between size and quality of management.

• Exporting is a developmental process that may be conceptualised either as a learning sequence or as export stages.

• The importance of various factors influencing export success depends on the stage that the company is in.

• Export profiles could be used by government agencies, by banks, by export agents, to identify non-exporters with a high potential for becoming exporters.

firm's control that are required for successful export. To provide an adequate review of macro as well as the management literature is beyond the reach of this paper. Consequently, our review will focus on aspects closely related to managerially controllable variables, and it will use the framework shown in the lower part of Figure 1.

This level is comprised of managerially controllable factors — firm characteristics, firm competencies, and firm strategy. These groups of variables have been extensively studied during the 1978-88 period, and the 55 studies reviewed here directly relate managerial factors to export performance. Combined with Bilkey's (1978) review, we believe that this review defines the body of knowledge concerning relationships among these variables and export performance. Such knowledge appears to be a prerequisite for further export research advancement, for managements that may want to enhance their firms' export performance, and for establishment of sound macro export policy.

Description of the Studies Included Table II summarises the descriptive properties of the 55 studies. For each study, the dependent variable used, sample size, relevant population, and analytical approach used are identified. In this group of studies more than 9,000 cases (firms and/or managers) were studied in many diverse industries and geographical locations. Thirty of the 55 studies were conducted in the United States, while the remaining drew experience from Canada, Brazil, Norway, Peru, Turkey, West Germany, and United Kingdom.

The most common dependent variable among the studies is "propensity to export" or "export performance". This trait was operationalised in many



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different ways. In fact some studies used several dependent measures to gauge these dimensions. Independent variables were also grouped according to the underlying construct that they attempted to measure. No effort was made to identify measurement difficulties, sampling, validity, or particular technical problems with each individual paper. In fact, in some papers it was not possible to identify such. Consequently, the summary table provided in this article represents a general "best effort" synthesis of the studies and does not represent a critical evaluation of each individual paper or necessarily our agreement with the particular measurement, methodology or sampling used.

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Table II. Sum

mary of Study

Characteristics

Summary of conclusions related to:

Angelmar and Pras (1984)

Axinn (1988)

Bauerschmidt et al. (1985)

Bello and Barksdale (1986)

Bello and Williamson (1985)

Bilkey (1985)

Bilkey (1982)

Bodur and Cavusgil (1985)

Brady and Bearden (1980) (1980)

Brooks and Rosson (1982)

Sample size

78

105

117

244

297

338

168

88

251

278

Country

USA

Michigan, USA;

Ontario, Canada

USA

USA

USA

USA

Wisconsin, USA

Istanbul, Turkey

South East USA

Canada

Population/ industry

French films

Machine tool

manufacturing

Paper

Trade shows Export

management company Exporters

Manufacturing firms

Export managers

Small manufacturing

firms Manufacturing

firms

Analytical approach

Discriminant analysis

Regression analysis

Factor analysis ANOVA

Chi-square

Breakdowns

Regression analysis

ANOVA

ANOVA

ANOVA and crosstabs

Dependent variable

Export distributor

product acceptance

Export intensity

Barriers to export

Export problems Export sales

Propensity to export Perceived

export profit

Export to OECD vs

Middle East and North

Africa Export

attitudes

Perceptions towards exports

Firm characteristics

PR, PPL

MC+, PF+, PG+

MC+, FP+, PD, PDS

PC- ,PD+

FS+, PDS+

PD, PRO

PD, PR

Firm competencies

MK

EEA, CA+

MP-

MK

MK, MCS

MK

Export strategy

UI

MS+, UI+, S+

PM

Managem

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Table II. Sum

mary of Study

Characteristics (Continued)

Burton and Schlegelmilch (1967)

Cavusgil (1984a)

Cavusgil (1984b)

Cavusgil (1984c)

Cavusgil and Kaynak (1982)

Cavusgil and Nevin (1981)

Cavusgil et al. (1979)

Cooper and Kleinschmidt (1985)

Christensen et al. (1987)

Croockell and Graham (1979)

Czinkota and Johnston (1983) (1983)

Sample size

NA

175

175

70

149

473

473

142

152

136

219

Country

West Germany and UK

Wisconsin USA

Wisconsin USA

Wisconsin USA

Canada

Wisconsin USA

Wisconsin USA

Canada

Brazil

Canada

USA


Manufacturing firms

Manufacturing firms

Manufacturing firms

Manufacturing firms

Manufacturing firms

Manufacturing firms

Manufacturing firms

Electronics manufacturing

Exporters

Exporters

Sales and marketing managers

Analytical approach


MCA and AID

MCA and AID

Crosstabs

Factor analysis

MCA and AID

MCA and AID

ANOVA


Crosstabs

ANOVA

Dependent variable

Export vs non-export

Level of export

Level of export

Propensity to export Export vs non-export Export vs non-export Propensity to export

Export growth

intensity Exporting/ no longer exporting Propensity to export Perceived

export problems

and attitudes

Summary of conclusions related to: Firm

characteristics

FS- , PR-, PPL+

MC+, PR+, PR-

PD, PDS, PP, PRO

FS+, MC+

FS- , MC+

FS- , PDP+

FS+

F S -

Firm competencies

VIP+, EEA+ EP+, MCS+,

QC+ T+, EEA+,

EP+ MP+, EEA+,

EP+

T+, MP+, EEA+, EP+

T+

T, MP+, QC+

MK, EEA, CA

Export strategy

PM

PM

MS, PM, PD

MS, PM, P

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Table II. Sum

mary of Study


Daniels and Robles (1985)

Denis and Depelteau (1985)

Diamantopoulos and Inglis (1988)

Gottko and McMahon (1988) Gronhaug and Lorenzen (1982)

Johnston and Czinkota (1985)

Johnston and Czinkota (1982)

Joynt (1982)

Kaynak and Kothari (1984)

Kaynak and Stevenson (1982)

Kirpalani and Macintosh (1980) Lee and Brasch (1978)

Sample size

41

51

48

146

40

200

301

85

486

192

34

36

Country

Peru

Quebec Canada Scotland

UK

Oregon USA

Norway

USA

USA

Norway

USA Canada Canada

USA Canada

Nebraska USA


Textile firms

Manufacturing firms

Food and beverage exporters Lumber

Manufacturing firms

High tech

Manufacturing firms

Manufacturing firms

Manufacturing firms

Manufacturing firms

Sales and managers Exporters

Analytical approach

ANOVA

N/A

T-test discriminant

analysis Chi-square

t-test

Bivariate correlation

ANOVA

Crosstabs

Crosstabs

N/A

Factor analysis

Factor analysis

Chi-square

Dependent variable

Technology adoption as a function of export

Propensity to export

Export involvement


Propensity to export Attitudes towards export

Perceptions on export success Export

motivators Propensity to export Perceived barriers

to export Export growth Export

decision


characteristics

MC+. PC- , PRO +

FS+

FS+, PF+, P D + , P R -

FS+, MC+

PF, PDP, PD PP, PPL,

PRO MC+, PC+,

PPL+

PD, PDS, PP PG

PDP+, PG+

MC

MC

Firm competencies

T, MP

EEA-

MP

MK

T+

T+, QC+ CA+

MCS

Export strategy

MS

MS

MS+, UI+

PM

PM+, P+

PM, PRO, P

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Table II. Sum

mary of Study


Malekzadeh and Nahavandi (1985) McConnell (1979)

McGuinness and Little (1981) O'Rourke (1985)

Piercy (1981a)

Piercy (1981b)

Rabino (1980)

Reid (1986)

Reid (1984)

Reid (1983)

Reid (1985)

Reid (1982)

Sample size

296

148

152

218

231

118

46

89

89

89

176

89

Country

California USA

New York USA

Canada

USA

UK

UK

Mass. USA

Ontario Canada Ontario Canada Ontario Canada

Ontario Canada

Ontario Canada


Manufacturing firms

Domestic manufacturing

firms Manufacturing

firms N/A

Medium-size firms

Medium-size firms

High-tech exporters

Small firms

Furniture and fabrication




Analytical approach



Factor analysis

N/A

Chi-square

Cross tabs

Personal interviews

Regression analysis

Regression analysis

Regression analysis

Regression analysis

Regression analysis

Dependent variable

Export vs non-export Propensity to export

Export sales

Propensity to export Exporter

international-isation


PF+, PDP+, PPL+

on export Propensity to export Intention to export

Export market

expansion Perceived propensity to export Propensity to export


characteristics

MC+, PF- , PG-

PDP-, PR-

FS+, PC+

FS+, PP+

FS+

FS+, PPL+

FS+

Firm competencies

MK+, MP+, QC-EP+

T+

EEA, CA

EEA

MS, UI

T+. MK+

MK+

Export strategy

P+

PD-

PM

PM, P+

PM, P+

MS

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Table II. Sum

mary of Study


Rosson and Ford (1982)

Roy and Simpson (1981)

Schlegelmilch (1986)

Sood and Adams (1984)

Sullivan and Bauerschmidt (1987)

Suzman and Wortzel (1984) Tesar (1982)

Ursic and Czinkota (1984) (1984) Vozikis and Mescon

Yaprak (1985)

Sample size

42

124

310

32

62 117

21

664

126

32

84

Country

UK Canada

South West USA

UK West Germany

USA

European USA

USA

USA

USA

Georgia USA

Detroit USA


Distributors manufacturing

Small and medium sized

firms Food and

mechanical engineering Furniture

manufacturing Paper and

pulp

Medium sized firms Exporters

Exporters

Exporters

Sales and marketing managers

Analytical approach

N/A

Breakdowns


Breakdowns

Factor analysis

Breakdowns

Regression analysis

ANOVA

N/A

Chi-square

Dependent variable


Exports vs. non-export


Export sales

Barriers export

"Export success"

Aggressive vs passive

exports Propensity to export

Propensity to export Export vs non-export


characteristics

MC+, PD+

PR, PL

MC, PC, PDP, PD,

PP

PF+

Firm competencies

CA

EP

MK

Export strategy

UI+

MS, PD

UI, PRO

Codes used: * Summary of results relate to statistically significant relationships reported by authors + Positive relationship - Negative relationship

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Table II. Sum

mary of Study


Firm Characteristics

FS Firm size MC Management commitment PF Perceptions on financial incentives PC Perceptions on competition PDP Perceptions on domestic market

potential PD Perceptions on distribution PDS Perceptions on delivery service PP Perceptions on pricing PG Perceptions on government incentives PR Perceptions on risk aversion PPL Perceptions on profit likelihood PRO Perceptions on promotion

Firm Competence

T Technology MK Market knowledge MP Market planning EEA Export exploration analysis

EP Export policy MCS Management control systems QC Quality control CA Communications ability

Export Strategy

MS Market selection UI Use of intermediaries PM Product mix PD Product development

PRO Promotion P Pricing S Staffing


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Export Performance Criteria Criteria for evaluating export performance of individual firms are elusive (Kirplani and Macintosh, 1980. The studies reviewed here utilise one of two fundamental approaches to measuring export performance. The first approach is to separate firms into categories of exporters and non-exporters. The implication is that exporting per se is sufficient to ascribe success to a firm. The second approach measures a firm's position on some dimension of export performance. The most commonly used dimensions are rate of growth in export sales and percentage of total sales accounted for by exports.

The primary objective of the studies that use the exporter/non-exporter dichotomy (Cavusgil and Nevin, 1981; Yaprak, 1985, Burton and Schlegelmilch, 1987; Christensen et al., 1987) is to develop a profile of the characteristics that differentiate the categories. The most commonly used analytical techniques for accomplishing this objective are discriminant analysis, automatic interaction detection (AID), and Chi-square analysis. An underlying problem in this approach is the assumption that export per se is a sufficiently desirable objective. The approach does not recognise that organisations pursue export for the benefits associated with increased growth and profitability. Grouping all exporters into one category assumes that the characteristics of poorly performing export programmes are as important as those of highly successful programmes. The results from studies utilising this approach could reflect practices of marginally successful export programmes since they are likely to outnumber the highly successful exporters.

The studies that measure export performance along some dimension of success reflect an improvement in performance criteria over the categorical approach. These studies generally utilise multiple regression (Kirpalani and Macintosh, 1980, McGuinness and Little, 1981) or analysis of variance (Czinkota and Johnston, 1983; Cooper and Kleinschmidt, 1985) for assessing the impact of predictor variables on export sales growth or percentage of sales accounted for by export. While numerous studies document the importance of growth as a motivation for export (Kirpalani and MacIntosh, 1980; Edmunds and Khoury, 1986), others also underscore the motivation that long-term profits from export provide (Bilkey, 1978, 1982; Christensen et al. 1987).

The review of the conclusions is organised according to; 1) firm characteristics. 2) firm competencies and, 3) strategy. Each section is represented by a column in Table II that shows which of the independent export predictor variables are related to the dependent variable.

Firm Characteristics In the following section, firm characteristics are divided into three categories. These include variables related to firm size, variables related to management export commitment and expectations, and management attitudes and perceptions on a number of important export-related dimensions. It appears that management commitment and management's perceptions and attitudes towards export problems and incentives are good predictors of export success.



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Organisation Size For all the attention that this variable has received, there is little agreement regarding the impact that organisation size has on either propensity to export or export success. The most common hypothesis is that larger companies have size-related advantages that enable them to more effectively engage in export. Reid (1982) concludes that absolute size affects export entry into new foreign markets. He suggests that small firms' export expansion is influenced by financial and human resources such as sales, assets, number of employees, but to a lesser extent the firm's stock of managerial personnel. Cavusgil and Nevin (1981), Christensen et al. (1987), and Gronhaug and Lorenzen (1982) find size related differences between exporters and non-exporters. In contrast, Cooper and Kleinschmidt (1985) establish a negative relationship between size and export intensity, while McGuinness and Little (1981), Czinkota and Johnston (1983), and Diamantopoulos and Inglis (1988) conclude no relationship.

In a critique of the Czinkota and Johnson (1983) study, Reid (1985) raises several methodological issues that may confound the results from a study concerning organisational size. These include lack of a conceptual base for predicting the relationship between organisation size and export performance.

Management Commitment All studies in this category conclude that there is a positive relationship between management commitment and propensity to export (Bello and Barksdale, 1986; Cavusgil 1984a; Cavusgil et al., 1979; Gronhaug and Lorenzen, 1982; Kirpalani and Macintosh, 1980; Rosson and Ford, 1982 and Sullivan and Bauerschmidt, 1987). In firms where management has realistic but ambitious expectations with regards to export performance, exports are higher than in firms without these expectations.

Export goal consistency among management is important for export success, while lack of willingness by management to commit resources to export has negative influence on performance (Cavusgil and Nevin, 1981). Gronhaug and Lorenzen (1982) found high positive correlation between management involvement and export performance among Norwegian exporters.

Management Perceptions Thirty-three studies evaluated relationships among management perceptions, attitudes, and the propensity to export. As summarised in Table II, management perceptions appears to be one of the most important firm determinants for export success. Management disposition, (mis)perceptions, awareness, and attitudes are dependable determinants of export performance. Based on a survey of 473 firms, Cavusgil (1984a) concludes that management's attitudes towards risk-taking are positively related to export performance. Bauerschmidt et al. (1985) and Axinn (1988) determine that negative perceptions about risk and potential for export were substantial barriers to export. Bauerschmidt et al. (1985); Kaynak and Stevenson (1982); Kaynak and Kothari, (1984); Malekzadeh and Nahavandi (1985)


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found that management of firms already exporting did not perceive export assistance and tax incentives as important as did non-exporters. Further, exporters tend to perceive external financial incentives to be less important-than do non-exporters (Bauerschmidt et al., 1985; Bello and Barksdale, 1986; Gottko and McMahon, 1988; Rabino, 1980) and tend to perceive the distribution, service, delivery problems and costs as lesser obstacles to export than do non-exporters (Bello and Barksdale, 1986; Brady and Bearden 1979, Gottko and McMahon, 1988; Rosson and Ford, 1982; Sullivan and Bauerschmidt 1987; and Diamantopoulos and Inglis, 1988).

Perceptions related to domestic market situation and market potential predict export success. Managements that perceive large opportunities in the domestic market or have domestic supply problems are less likely to export or have poorer export performance than those that have have capacity available and can grow within existing infrastructure (Cooper and Kleinschmidt, 1985; Kaynak and Stevenson, 1982; McConnell, 1979; Rabino, 1980 and Sullivan and Bauerschmidt, 1987). In sum, knowledge of the nature of management attitudes, (mis)perceptions and dispositions towards exports is important to enhance export performance.

Competencies Management's ability to apply appropriate technology, establish necessary commitment, acquire international knowledge, institute consistent and realistic export objectives, develop export policy, and establish the necessary management control systems are important export competencies. In Table II the various conclusions related to export competencies are summarised.

Technology Technology intensiveness is consistently found to be related to propensity to export (Cavusgil and Nevin, 1981; McGuinness and Little, 1981; Cavusgil, 1984a; Cooper and Kleinschmidt, 1985; Daniels and Robles, 1982; and Joynt, 1982). One study concludes that technology is best applied as a standard in all markets (Christensen et al., 1987), however contextual factors could explain this relationship. If the respondents in these studies primarily market their products in developed countries, technology could be an important source of competitive advantage over local producers. In less developed countries, though, other sources of competitive advantage such as low cost could be more important.

In a recent study of 89 Canadian indigenous enterprises, Reid (1986) found very little relationship between technology and export performance beyond encouraging a firm to early entry into an export market. He argues that mere possession of a specialised knowledge does not create a competitive advantage. It depends on how the firm takes advantage of it. He criticises current research supporting the thesis that technology is related to export performance because associations between export performance are based on research in industries where exports include significant intra-company trading. Consequently, he concludes that current research on technology does not reflect true export performance. The evidence on technology and export performance is thus mixed.



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Export Policy, Planning, and Market Knowledge The implementation of a process for systematically exploring, analysing, and planning for export seems to be a very powerful discriminator between successful exporters and non-exporters. Cavusgil (1984a, 1984b) Christensen et al. (1987), Daniels and Robles (1985), Malekzadeh and Nahavandi (1985), Piercy (1981a, 1981b), and Reid (1983,1986) found that the use of a formal approach to market planning separated companies that are still exporting from companies that have abandoned their export efforts. Several other studies (Cavusgil and Nevin, 1981; Cavusgil, 1984a; Denis and Depelteau, 1985; Malekzadeh and Nahavandi, 1985; Burton and Schegelmilch, 1987; and Diamantopoulos and Inglis, 1988) found a much higher propensity to export among firms with formal market planning or export exploration procedures, or large export staffs. Ursic and Czinkota (1984) conclude that younger firms tend to be better exporters than older firms, because young firm managements tend to more aggressively seek export market information. Finally, formal policy for pursuing export opportunities was found to be important by Cavusgil and Nevin (1981) and Burton and Schlegelmilch (1987).

Stage in Export Adoption Process A number of studies have related export performance to the various stages of a firm's export adoption process. Vozikis and Mescon (1985) report that functional problems encountered by exporters vary according to the different stages in the process. While management problems are encountered throughout the process, marketing and export marketing functional problems are primarily encountered during the initial stages. Cavusgil (1980) concludes that firms in earlier stages of the internatibnalisation process are more concerned with effective marketing communication and sales efforts than firms at later stages in the process. These firms consider customer service as a critical performance variable.

Management Systems Successful exporters seem to place a great deal of reliance on formal control systems for monitoring performance in export markets (Kirpalani and Macintosh, 1980; Burton and Schlegelmilch, 1987). Successful exporters also seem to favour decentralised decision making (Christensen et al., 1987) and value formal education and training programmes for management (Burton and Schlegelmilch, 1987).

Quality Control Consistent with the findings on technology and unique product (see strategy section), Burton and Schlegelmilch (1987) and Christensen et al. (1987) found that successful exporters had a stronger quality control function; departments were better organised and department managers were better qualified that in firms that had abandoned their export programmes. Daniels and Robles (1982) concluded that product quality was a key competency for Peruvian exporters. Joynt (1982) reported that Norwegian exporters perceive their most important competency to be product quality. In contrast, Malekzadeh and Nahavandi (1985) concluded that product quality did not discriminate exporters from non-exporters. Thus, it can be concluded that research in this area is limited and the results are unclear.


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Communication Capability In spite of the emphasis on language and communication capabilities only four studies relate this to propensity to export. Bello and Barksdale (1986) concluded that trade show exhibitors that are not committed to exports and do not have export staff encounter problems with foreign customer communication. Czinkota and Johnston (1982) determined that both small and medium sized firms rank export related communication difficulties first in terms of problems encountered when exporting. In contrast Joynt (1982) reported that his entire sample of 85 Norwegian firms had some German and English capability and two-thirds had French capability. Finally, Sullivan and Bauerschmidt (1987) found that Europeans see language capabilities as less of a barrier to export them than do Americans. However, English is an important international language and may in export situations be the basis for the majority of international communications.

Strategy Market Selection Dennis and Depelteau (1985) conclude that slow growth exporters place greater emphasis on LDC markets while higher growth exporters place relatively greater reliance on industrialised markets. Christensen et al. (1987) state that successful Brazilian exporters rely more heavily on industrialised markets. Cooper and Kleinschmidt (1985) find that exporters with a world orientation, as opposed to reliance on a nearest neighbour, realise a more rapid growth rate in export sales, while Diamantopoulos and Inglis (1988) find high-involvement exporters have much broader world market coverage.

Product and Product Line Findings of the importance of unique product attributes (Cavusgil and Nevin, 1981; McGuinness and Little, 1981; Burton and Schlegelmilch, 1987) and programmes for adapting products to local markets (Kirpalani and Macintosh, 1980) are consistent with the findings of the importance of technlogy. In a departure from this stream, Christensen et al. (1987) find that a standard product is more successful. Interestingly, their sample was comprised of Brazilian firms rather than the more common US, Canadian, and European firms. Since Brazil's neighbours are less developed than the latter countries' neighbours, this provides some support for the proposition that the stage of development of the selected markets is an important mediator of the relationship between product characteristics and export success.

Although product line management has not been extensively investigated, Christensen et al. (1987) conclude that companies with multiple product lines are more successful in their export activities. Kirpalani and Macintosh (1980) establish that companies with narrow product lines achieve higher levels of export sales.

Pricing Kirpalani and Macintosh (1980) establish that successful exporters arrange alternative price "packages" using tag price, discounts, and credit with the effect



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of giving the foreign customer an attractive total deal. Christensen et al. (1987) conclude that successful exporters rely on international competitive prices as a benchmark and do not ask for premiums for exchange and extraordinary risks. However, they also find that successful exporters count on internal factors for making pricing decisions. The resolution to this potential contradiction may be that while successful exporters consider all relevant costs in their decision, the price point used in an ROI calculation is the competitive price. Consequently, the export decision considers both competitive prices and internal costs and hurdle rates.

Promotion Kirpalani and Macintosh (1980) found that firms that believed that promotion in export markets was an important activity achieved higher levels of export sales than those that emphasised promotion less. Yaprak (1985) found that exporters had greater confidence in their export promotion capabilities than did non-exporters.

Distribution Fifteen studies related management perceptions on importance of distribution to propensity to export. All of these studies confirm that management perceives distribution, delivery and service to be important export success factors. These findings are summarised in Table II. In addition a number of studies (Bello and Williamson, 1985; Bilkey, 1982; Gronhaug and Lorenzen, 1982; Rabino, 1980; Rosson and Ford, 1982; and Yaprak, 1985) establish a positive relationship between distribution strategy and export performance.

Conclusions As of the end of 1988 there is no clear-cut formula for developing a successful export programme. However, there appears to be sufficient evidence to draw a number of general conclusions. With regards to firm characteristics we conclude as follows: first, company size by itself is not an important factor unless it is linked to aspects such as financial strength or variables related to economies of scale. Second, in companies where management is firmly committed to export, export performance tends to be higher. Third, firms that have better management systems and plan export activities well are more successful than those that don't. Fourth, export experience is important, and firms that have experience are likely to do better than firms that are just starting.

Competencies are probably more important than firm characteristics. First, we conclude that unless management has an international vision, consistent export goals, favourable perceptions and attitudes towards export, is willing to take risks and is capable of engaging positively in export activities, a firm is not likely to become a successful exporter. Second, technology may or may not be important for success. Export success through technology depends on good management and what markets the firm decides to enter. Finally, a substantial number of non-exporters perceive export to be risky, to require more resources, export assistance,


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and tax incentives than may be required, which leads us to believe that pre-export programmes focusing on correcting management misperceptions and erroneous beliefs may be worthwhile.

Research Recommendations This review of the export literature leads us to conclude that there are substantial opportunities to increase our level of knowledge regarding successful export practices by improving research design and by framing new research questions based on previous findings.

Research Questions We judge much of the research reviewed to be somewhat simplistic and exploratory due to its focus on simple bivariate (i.e., one predictor and one dependent variable) relationships. We argue that this may be a cause for many of the contradictory results found. The relationships between firm characteristics, competencies, strategy, and performance are complex. For example, the stage of market economic development is likely to moderate the relationship between demand for a product's technological sophistication and export success. Consequently, when examining export success (in different markets) researchers should control for stage of market development. We suggest that the next phase of export research focus on understanding more complex relationships. Some suggestions are:

(1) How does stage of market economic development moderate the relationship between product characteristics and export performance?

(2) How does organisational responsibility for export affect the export strategy-performance relationship?

(3) How does stage of export development dictate the importance of and influence the effectiveness of distribution strategy?

(4) Are there "generic" export strategies? What trade-offs must be made when selecting a "generic" strategy?

(5) What managerial characteristics are associated with positive export attitudes? (6) How do promotion strategy and cultural distance interact?

Research Design The two major areas for improvement are performance measurement and use of longitudinal designs. The predominant measures of export performance currenty are exporter/non-exporter and export sales measures (absolute level, growth, and proportion of total sales). While these may be important intermediate indicators of export performance, performance must ultimately be assessed in terms of sustained profitability. A preliminary step would be to determine the objectives that firms have when they engage in export and how progress towards those objectives is measured. This could lead to the development of a multiple criteria model of export performance which would allow assessment of the effect that export practices have on different types of performance measures.



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The majority of export studies reviewed here utilise cross-sectional research designs. Provided that we would want to make statements about causation of export performance, longitudinal research may facilitate stronger conclusions. While there is greater human and financial cost associated with this type of research, we suggest establishment of an extensive database consisting of a stable panel of small to medium-sized exporters. This should be a top priority of one of the centres for international research that are being developed at many US universities.

In the absence of longitudinal data we believe it is imperative that researchers develop reliable and valid measures of their constructs, make available their instruments, and properly report their evidence.

Final Remarks Given the quantity of published research on export practice it is surprising that so few solid conclusions are available. This may primarily be the result of relatively simple research questions, construct measures, and research designs. Most of the research reviewed here has been of an exploratory nature. It appears to form a rather isolated field, relating little to theory in marketing and management. It is time to take what is known, develop new research propositions based on current knowledge and existing theory, and establish a focused research agenda.

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Documents

Management Influences on Export Performance: A Review of the Empirical Literature 1978‐1988