Determinants of export strategy and performance : evidence from British exporters

How some firms achieve superior international performance relative to other firms in the same market, as one of the critical questions in international strategic management, is inextricably bound up in questions such as why firms differ, what initiates and drives their internationalization strategies, and what is the main source of their competitive advantage that generates superior performance in the international context. Firm export performance is regarded as one of the key indicators of the success of a firm's export operations, and as such has been extensively studied phenomenon. Numerous studies have been conducted pertaining to provide better understanding of the factors (firm- or environment-specific) and behaviours (e.g., export strategy) that make exporting a successful venture. However, the research results to date are far from uniform and conclusive. This thesis advances the resource-based view of the firm (RBV) as a valuable theoretical framework in identifying advantage-generating resources and capabilities as critical determinants of the export strategy and export performance. Conceptually, this research is an attempt to integrate the extant views of the firm's internationalization process, by employing a resource-based framework. The findings in this thesis were derived by analysing a set of primary data from 356 British exporters generated in 2007 via an electronic and Internet based survey. The findings in this thesis endorsed its main propositions. Particular internal, firm specific factors were found to be the most significant determinants of the export initiation process, the firm's degree of geographic diversification, and the firm's export strategy and performance. In particular, managerial, knowledge, planning and technology resources and capabilities were found to have a significant positive effect on export success. These resource factors are either skill-based or 5 knowledge/process-based resources or capabilities and as such have high levels of tacitness, complexity and dynamism, and consequently are firm-specific and difficult to duplicate. These resources and capabilities generate resource-based competitive advantage and become the driving factor of the firm-level performance differences. Furthermore, the study findings provide empirical validation of the proposition that resources and capabilities are two distinct concepts. This study therefore provides fresh empirical support for the RBV propositions. This thesis also contributes to the ongoing debate of the potential gap between academic research and practitioners' views of critical success factors. This dissertation contributes to the better understanding of the value and importance of particular internal, firm-specific resources and capabilities as determinants of the firm's export strategy and performance. The theoretical and methodological grounding of this study contributes to the advancement of export related research in several respects. First, by providing better specification of the nature of the effects - direct or indirect - of particular resource factors on export initiation, strategy and performance. Second, by examining both, the individual and concurrent effects of the resource variables on export strategy and performance. Third, by conducting exploratory as well as confirmatory factor analysis to validate construct measurements, and utilization of structural equation modelling to improve validity, reliability and error levels. Fourth, by employing a composite measure of export performance, including financial and non-financial options. Fifth, by contrasting the empirical findings with the management's subjective (perceptual) observations of the investigated relationships within a same data sample. 6 This study opens future research opportunities for applying the proposed resource based integrative framework in investigations of resource-strategy and resource performance relationships in different organizational contexts.