Academic journal article Journal of Small Business Strategy

Entrepreneurial and Market-Oriented Activities, Financial Capital, Environment Turbulence, and Export Performance in an Emerging Economy

Academic journal article Journal of Small Business Strategy

Entrepreneurial and Market-Oriented Activities, Financial Capital, Environment Turbulence, and Export Performance in an Emerging Economy

Article excerpt

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

Exporting is a vital strategy for many firms because it enables them to expand markets, gain new customers and improve performance (Cavusgil & Zou 1994; Leonidou, Katsikeas, & Samiee 2002). For example, for firms with substantial exporting operations, there is the opportunity to leverage existing capabilities across different countries to create scale economies otherwise unavailable in home markets (Leonidou et al., 2002). Through exporting, new market opportunities are created to sell new products and connect with important constituencies in different markets (Cavusgil & Zou 1994; Leonidou et al. 2002).

Since the seminal works of Lumpkin and Dess (1996) on entrepreneurial orientation (EO) and Kohli and Jaworski (1990) on market orientation (MO), the two constructs have taken a central position in general management theory and research (e.g. Kirca, Jayachandran, & Bearden, 2005; Rauch, Wiklund, Lumpkin, & Frese, 2009; Baker & Sinkula 2009; Wang 2008; Ellis 2007). Essentially, the two constructs are viewed as critical resources that offer firms the capability to explore evolving entrepreneurial opportunities and exploit existing product market competences (Baker & Sinkula 2009; Bhuian, Menguc, & Bell, 2005; Jaworski, Kohli, & Sahay, 2000), making the explanatory power of EO and MO activities on firm performance, in both domestic (e.g. Rauch et al., 2009; Kirca et al., 2005) and overseas business operations (Balabanis & Katsikea 2003; Cadogan et al. 2009; Zahra and Garvis 2000; Knight and Kim 2009), major themes in scholarly research (e.g. Kropp et al. 2006; Cadogan, Kuivalainen, & Sundqvist, 2009; Zahra & Garvis 2000; Knight & Kim 2009). However, despite years of valuable scholarly insights and extensive managerial interests, there are at least three important areas to extend the existing literature.

First, EO and MO are considered to be important within the context of exporting (Balabanis & Katsikea 2003; Cadogan, Diamantopoulos, & Siguaw, 2002; Ellis 2007). However, previous research has not considered how high EO and high MO activities may complement each other when firms engage in export operations. The strategic orientation literature suggests that a firm's ability to implement high levels of EO and MO activities simultaneously may bring about greater benefits, as both orientations have advantages that attenuate for the potential drawbacks of the other (Hakala 2011; Hult & Ketchen 2001). Thus, an export strategy that emphasizes the simultaneous implementation of high levels of both orientations should enable firms to generate greater synergy between entrepreneurial abilities and market-oriented competences to enhance performance in foreign markets (Atuahene-Gima & Ko 2001). However, despite the potential insights that this multifaceted export strategy offers for small business theory development and practice, the effects that high levels of both export EO and MO activities have on SME performance in export markets remains under-researched.

Second, research looking at how firms apply EO and MO capabilities in export markets has not examined key contingency factors, such as resource requirements and environmental conditions, that may shape the success of a strategy that simultaneously focuses on high levels of both EO and MO activities. Importantly, the literature suggests that SME exporters may struggle to effectively convert their exporting activities into higher performance because of resource limitations and a lack of experience in foreign operations (Kropp, Lindsay, & Shoham, 2008; Knight & Kim 2009). While the dominant approach in the small business literature is to test the impacts in main-effect only or two-way contingency effect models (e.g. Lumpkin and Dess 2001; Alpkan, Yilmaz, & Kaya, 2007; Renko, Carsrud, & Brannback, 2009; Knight & Kim 2009), we model the impacts of simultaneously high EO and MO, financial capital and export market environmental turbulence fit on export performance in three-way interaction models. …

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