Academic journal article Journal of International Business Research

Industry Sector and Export Performance of Small, Locally-Owned Firms

Academic journal article Journal of International Business Research

Industry Sector and Export Performance of Small, Locally-Owned Firms

Article excerpt

INTRODUCTION

There is a rich amount of work on the export performance of firms, especially the small and medium sized firm (Coviello & Jones, 2004; Jones & Coviello, 2005; Dana, 2004; Dimitratos & Jones, 2005; Rialp et al., 2005; Miesenbock, 1988; Leonidou et al., 1998; Leonidou, 1998; Leonidou & Katsikeas, 1996; Aaby & Slater, 1989; Coviello & McAuley, 1999; Oviatt & McDougall, 1994; Zou & Stan, 1998; Williams, 2009; 2011). These works have focused on different aspects of the firm's export performance such as: firm and managerial characteristics that impact on export performance (e.g. Leonidou et al., 1998), the impact of firm size and age (Zou & Stan, 1998; Miesenbock, 1988; Williams, 2011); factors that stimulate the decision to initiate export (Williams, 2009; Bilkey, 1978), among other issues. Still, the majority of works in this area focus on the managerial characteristics which influence export performance. Indeed, Aaby & Slater (1989: p.16) after reviewing 55 studies, which focused on the firm's export behaviour, concluded that: "it appears as if it is the management's commitment, perception and attitude towards export problems and incentives that are good predictors of export success". Further, Miesenbock (1988), in a comprehensive review of the literature, which looks at studies that focus on the firm's export behaviour, also shared the view that it is the persuasion of the decision maker that will determine whether or not the firm exports. This may help to explain the heavy bias towards looking at managerial factors in the quest to understand the firm's export behaviour.

Despite the heavy bias in research towards studying managerial factors in relation to small firms' export performance; other researchers have pointed out the importance of external variables that may influence performance (Zou & Stan, 1998; Cavusgil and Zou, 1994). Most studies focus on government policies (Alvarez, 2004; Wilkinson, 2006) and market characteristics (Katsikeas et al. 1996; Cavusgil and Zou, 1994). Although some efforts have been made in looking at external factors, it appears that there is still some way to go in order to better understand the impact of external factors on export performance. Indeed, in their review of the literature on the export performance of the firm, Zou & Stan (1998) argued that the research on the environmental factors that influence export performance was the lowest. According to Madsen (1987), it seems that the lack of emphasis on the environment is still characterising the export performance studies in the last decade. This observation made over two decades ago is still relevant today. Although there is a growing literature on the export performance of the firm (Leonidou & Katsikeas, 1996; Leonidou et al., 1998), very little attention is paid to the role of external factors such as the industry sector in which the firm operates, in influencing the export performance of the firm. This is even more so, when the research is analysed from a geographical perspective. The role of industry sectors in small, open economies has not been studied to determine their impact on the export performance of the firm. For small, open economies, it is assumed that all firms will export if they are to grow, and survive because the small size of the economic sector will make it infeasible for firms to concentrate their activities solely on the local market (1). However, with this expectation in mind, not one of the studies has focused exclusively on the role of industry sector on the export performance of the firm, especially the small, locally-owned firms (2). It is this gap that has motivated this study. The study therefore aims to understand whether or not the industry sector has any impact on the export performance of the firm. The guiding question will be: what is the impact of industry sector on the export performance of small, locally-owned firms in a small, open economy? …

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