An Inquiry into Successful Exporting: An Empirical Investigation Using a Three-Stage Model

Abstract

Are there some specific and measurable characteristics common to all successful exporters? Past research efforts in the area of export management have identified several firm and managerial characteristics associated with the export activity of manufacturing firms (Cavusgil and Naor 1987, Moini 1992, Reid 1982). In the literature, export performance or success has been evaluated by a variety of measures, such as export intensity (export sales as a percentage of total sales) or export growth (Reid 1982, Cooper and Kleinschmidt 1985; Beamish, Craig, and McLellan 1993). Although reliance on a single variable as a gauge of export success was shown not to be valid (Cooper and Kleinschmidt 1986), prior research that measured export performance using a single variable of success reflected an improvement in performance criteria over the categorical approach (Aaby and Slater 1989). This research uses a multivariable approach to predict export success. A survey of 102 small exporters in Wisconsin identified characteristics that contribute to the export success of the firm. By concurrently using export intensity and export growth as measures of success, this study provides a better picture of export performance. REVIEW OF THE LITERATURE A review of previous studies identified a wide range of variables associated with a firm's success in exporting (Bilkey 1978, Aaby and Slater 1989). These included firm characteristics (size, years of export experience, comparative advantages, and management expertise), managerial expectations from exporting (profitability, risk, and cost), managerial characteristics (age, education, and knowledge of foreign languages), and foreign market search. This study integrates the results of past research. Firm Characteristics Firm size is often regarded by export researchers as a critical variable in explaining export behavior and success (Cavusgil and Naor 1987; Louter, Ouwerkerk, and Bakker 1991; Denis and Depelteau 1985; Cristensen, da Rocha, and Gartner 1987). Some researchers have used the number of employees as a measure of size (Bilkey and Tesar 1977), while other researchers have used sales volume (Czinkota and Johnston 1983). For all the attention firm size has received, there is little agreement regarding the impact that organizational size has on export success. Reid (1982), for example, reported that larger firms are less constrained in devoting financial and human resources (as defined by sales, assets, number of employees, and managerial personnel) to exporting because of the greater availability of these resources. In contrast, other studies found no relationship between firm size and its commitment to export (Bonaccorsi 1992, Holzmuller and Kasper 1991, Czinkota and Johnston 1983, Diamantopoulos and Inglis 1988). Still others found a negative relationship between organizational size and export growth (Cooper and Kleinschmidt 1985). In light of the conflicting evidence, it seems no definitive conclusions can be drawn from past research on the relationship between export success and the size of the firm. Export experience is another firm characteristic facilitating export performance or success (Tesar and Tarleton 1982, Madsen 1989). According to da Rocha, Christensen, and Eduardo (1989), the greater number of years of export experience, the more probable it is that the firm would be an aggressive exporter. However, Denis and Depelteau (1985) reported that export experience has more influence on export volume than on the propensity to export. Czinkota and Ursic (1991) also noted that no-growth firms had significantly more exporting experience than did growth firms. They suggested that firms that have anticipated growth, particularly those with a lower export ratio, might have problems in increasing their exporting effort. Competitive advantages are another group of firm-related factors that assist initial involvement and continued success in exporting (Koh and Robicheaux 1988; Keng and Jiuan 1988; Rao, Erramilli, and Ganesh 1990; Louter, Ouverkerk, and Bakker 1991; Moini 1992). …