Import Stimuli and Import Development1

Introduction International purchasing decisions have become increasingly important for the survival and growth of the firm due to the improvement of manufacturing technology in many parts of the world, along with the tendency toward the adoption of liberal trade policies by most countries (Cavusgil/Yaprak/Yeoh 1993, Thorelli/Glowacka 1995). Nonetheless, an examination of the international business literature identifies the paucity of empirical attention that has been devoted to the import side of the international exchange process. The present study contributes to the limited platform of knowledge in this area, by investigating the factors that stimulate ongoing import engagement within a specific international business context: UK importing distributors trading with US exporting manufacturers. Specifically, the main thrust of this research is an examination of potentially significant differences in ongoing import stimuli between distinct groups of firms in terms of their level of import development. From a theoretical standpoint, this is the first systematic effort which empirically examines the issue of import stimuli in relation to import development. In the UK importing framework, the US represents the most important foreign supply market area outside the European Union. The emphasis upon exporting manufacturers is associated with the fact that manufactured exports have traditionally accounted for the vast proportion of total world trade (Grosse/Kujawa 1995). The focus on importing distributor firms centers around empirical evidence suggesting that the use of overseas distributors represents a common foreign market entry and expansion mode employed by manufacturers (Rosson/Ford 1982, Bello/Lothia 1995). Overseas distributors facilitate straightforward low-cost access to foreign markets, by controlling certain key export marketing functions pertaining mainly to their ability to provide: customer contacts; geographical market coverage; inventory-holding and order-processing facilities; market information; and advice and technical support (Rosenbloom/Larsen 1992). The next section focuses on the background and purpose of the study, followed by the presentation of the conceptual framework. The methodology adopted for this study is then explained. Next, the study findings are presented and discussed within the domain of the international marketing and purchasing literature. Finally, the implications of the study for business practitioners and public policy makers are highlighted, and directions for future research identified. Background and Purpose Import stimuli can be defined as those internal and external factors that influence a firm's decision to initiate, develop or sustain importing activities. The underlying premise in examining this issue can be sourced to the assertion that the nature of import stimulation determines the development pattern of the firm in international supply markets. More specifically, a well-prepared and motivated firm will have a better opportunity of success in international supply markets than an ill-prepared and weakly stimulated company (cf. Leonidou 1995). A review of the empirical work on import motivation reveals that knowledge is limited and largely fragmented. To date, there are three studies that have reported evidence regarding the elements stimulating a firm's decision to import. One research effort indicated that the major factors influencing the decision of developed country importers to trade with developing country manufacturers were good value for money, high product quality, satisfactory order processing, security of regular delivery and long-term supply, and high level of mark-up (Leonidou 1988). A second study, conducted among US firms, suggested that availability of better quality products, attainment of lower prices and shortage of items in the domestic market were the most important motives for international sourcing (Min/Galle 1991). …