the determinants of export export performance: a … a review of the empirical literature between...
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Determinants ofexport
performance
333
The determinants of exportperformance: a review of theempirical literature between
1987 and 1997Shaoming Zou
Assistant Professor of Marketing and International Business,Department of Marketing, University of Missouri, Columbia, USA, and
Simona StanDoctoral Candidate, Department of Marketing, University of Missouri,
Columbia, USA
There have been numerous studies published in the past 30 years on thedeterminants of export performance (see Aaby and Slater, 1989; Bilkey, 1978;Chetty and Hamilton, 1993; Madsen, 1987). This large volume of publications isa strong testimony of not only the importance of the issue but also thelegitimacy of inquiry into export marketing. As an area of inquiry, exportmarketing has been gaining increased recognition among academic disciplinesas a legitimate field of research. This recognition is well reflected not only bythe fact that exporting research has been published in the leading academicjournals, such as the Journal of International Business Studies, Journal ofMarketing, International Marketing Review, and Journal of InternationalMarketing, but also by the sheer number of publications related to exporting.
Its importance and legitimacy notwithstanding, the field of exportinginquiry is known for autonomous and unco-ordinated efforts (Aaby and Slater,1989; Leonidou and Katsikeas, 1996). In particular, the knowledge of thedeterminants of export performance is still characterized by a fragmentedcollection of confusing findings (Aaby and Slater, 1989; Cavusgil and Zou,1994). A major reason for the lack of clear conclusions regarding thedeterminants of export performance, in spite of the large volume of publishedstudies, is the lack of synthesis and assimilation of the fragmented knowledge(Leonidou and Katsikeas, 1996). Aaby and Slater (1989) and Chetty andHamilton (1993) represent excellent efforts to review and synthesize exportperformance literature. Unfortunately, two weaknesses in these reviews limit
International Marketing Review,Vol. 15 No. 5, 1998, pp. 333-356,
© MCB University Press, 0265-1335
Received February 1998Revised May 1998
Accepted June 1998
The authors gratefully acknowledge the assistance of Constantine S. Katsikeas of CardiffBusiness School, Cardiff University and Sylvie K. Chetty and R.T. Hamilton of the University ofCanterbury in New Zealand, in developing the bibliography for this review. The authors wouldlike to thank two IMR anonymous reviewers for their constructive comments on an earlier versionof this article.
InternationalMarketingReview15,5
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their ability to draw concrete conclusions. First, they cover studies that dealwith a variety of export dimensions which conceptually are broader thanexport performance, such as propensity to export, exporter/non-exporterdichotomy, and barriers to export. In order to avoid confusion, a more focusedreview on the determinants of export performance needs to be conducted.Second, both reviews are limited to “management influences” (i.e. firmcharacteristics, competencies, and strategy), leaving out the externalenvironment. However, since external forces are recognized to affect exportperformance (Cavusgil and Zou, 1994), a review is not complete unless theexternal environment is included.
Given the fact that the literature concerning exporting has proliferated in thelast ten years and that a number of different conceptualizations andmethodologies have appeared in the literature, it is worthwhile to offer anupdated review of what has been accomplished in the last decade and wherefuture research efforts should be directed. The purpose of this paper is twofold:
(1) to provide an updated review and synthesis of the empirical literaturebetween 1987 and 1997 of the determinants of export performance; and
(2) to discuss directions for future research aimed at developing bettertheories and advancing knowledge of export marketing.
This review is intended to overcome the two weaknesses in previous reviews byfocusing on export performance studies and by including both internal andexternal determinants of export performance. The article is organized intothree sections:
(1) description of the review methods; (2) presentation and discussion of the review results; and (3) discussion of future research directions in light of the findings.
MethodologyScope of the reviewThis review is focused on the empirical literature concerning the determinantsof export performance published between 1987 and 1997. The goal is to tracethe new developments in the last decade and identify trends in exportperformance research. Publications before 1987 are not included, as Madsen(1987) and Aaby and Slater (1989) have offered valuable reviews of those pieces.There are three major criteria used in selecting the articles for review. First, thearticles have to be empirical in nature, reporting data analysis and statisticaltests. Second, the articles have to use some kind of export performancemeasures as dependent variables. Third, the articles must be cross-sectional innature. Case studies are not included.
Identification of studiesThe studies included in this review were identified by a systematic process thatcombines electronic means with manual search. The electronic search was
Determinants ofexport
performance
335
conducted by using the ABI/INFO database and by searching the Internetresources, including the MCB University Press database. This method has theadvantage of efficiently generating a large number of articles which contain thekey search words and which are published in a wide variety of journals.Examples of the key words include terms such as export, exporting, exportperformance, export sales, export profits, export growth, export success, andsatisfaction with export. The manual search, on the other hand, was directed atsorting through the articles published in major marketing and internationalbusiness journals, tracking down those articles listed in the references of majorexport performance studies, and searching the books on exporting. Inparticular, the bibliography of Chetty and Hamilton (1993), Leonidou andKatsikeas (1996), and articles published in the Advances in InternationalMarketing provided a good starting point. The manual search helped identifyarticles which treat export performance as a secondary issue and are, therefore,less likely to be identified through electronic means.
Based on the three criteria, the search yielded 50 articles. Compared toMadsen (1987) who offered a similar review on 17 articles published between1967 and 1987, the number of studies reviewed here is significantly higher. Theidentified articles come from some of the most popular journals in marketingand international business, including the Journal of International BusinessStudies, Journal of Marketing, International Marketing Review, Journal ofInternational Marketing, Journal of Business Research, ManagementInternational Review, and Journal of Global Marketing, among others. Likeother reviews of export performance, the current review is limited by itsinclusion of only English-language publications. Non-English publications havebeen difficult to access. Nonetheless, it should be recognized that valuablecontributions to the exporting literature have been made in non-Englishpublications (e.g. the European schools). Researchers with language capabilityare urged to follow the example of Da Rocha and Christensen (1994) whosereview of Brazilian studies on exporting represents a good effort to integrateknowledge developed in Portuguese into the mainstream English literature.
Variable grouping procedureA major objective of this review is to synthesize the literature in a meaningfulway. Similar to the observations made in earlier reviews (e.g. Aaby and Slater,1989; Chetty and Hamilton, 1993; Madsen, 1987), the studies reviewed here haveinvestigated several hundreds of independent variables and used severaldozens of indicators for export performance. However, these operationalizedvariables can be grouped into a reduced number of more general factors, basedon their substantive conceptual meanings (Leonidou et al., 1998; Madsen, 1987).Using a procedure similar to content analysis and based upon the marketingliterature, the two researchers independently categorized the operationalizedvariables into several factors. The aim is to balance the danger of having toomany factors which are specific but lack parsimony with that of having too fewfactors which are parsimonious but may lack meaning. The two researchers
InternationalMarketingReview15,5
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resolved their differences through discussion and finalized a classificationscheme containing 33 factors for the independent variables and seven factorsfor the export performance. It should be noted that the final classificationscheme represents the authors’ informed judgment.
Analytical approachA rigorous approach to synthesizing a literature stream is meta-analysis.Through this approach, the effect sizes found by various studies can beevaluated and combined into a single measure of the effect of one factor onanother factor. However, effective use of the classical meta-analysis requiresthat there is a high degree of agreement across different studies with regard tothe measurement of independent and dependent factors and the statisticalapproach to data analysis (Hedges and Olkin, 1980). Because exportperformance studies are characterized by a diversity of measurement andanalytical approaches, only a weak form of meta-analysis, called the vote-counting technique, is applicable (Hedges and Olkin, 1980). Essentially, thevote-counting approach summarizes, for each independent factor, the numberof studies that report a significant positive effect, a significant negative effect,or a non-significant effect on export performance. Assuming that a positivetrue effect of a factor on export performance would result in a high probabilityof empirical studies reporting a significant and positive effect, the nullhypothesis of “no effect” should be rejected if the number of positive significantfindings is larger than a critical value, which depends on the total number ofstudies. For example, the critical value is four for ten to 15 studies, five for 20studies, and six for 30 studies (see Hedges and Olkin (1980) and Chetty andHamilton (1993) for a detailed explanation). Hence, the vote-counting techniqueoffers a simple and clear picture to readers with regard to the likely sign of thetrue effect of a factor.
However, the vote-counting technique assumes that effect sizes are constantacross studies and disregards sample size differences and the use ofmultivariate versus bivariate techniques (Chetty and Hamilton, 1993). Given thefact that several operationalized variables are grouped in one factor, one shouldbe cautious in interpreting the conclusions of the vote-counting technique.Researchers such as Madsen (1987) and Aaby and Slater (1989) prefer to adopta narrative approach to literature review. Through this technique, theresearchers subjectively interpret, based on their knowledge of the literature,the overall pattern of a factor’s influence on export performance withoutshowing specific statistics. However, by not showing summary statistics, theresearchers appear to impose upon readers their subjective interpretation of theliterature, leaving little room for readers to make their own judgment (Chettyand Hamilton, 1993).
This review takes a hybrid approach that combines the vote-countingtechnique with the narrative approach. The number of studies reportingsignificant positive, negative, and non-significant findings is summarized in atable for each factor influencing export performance, allowing readers to draw
Determinants ofexport
performance
337
their own conclusions based on the vote-counting technique’s guidelines forrejecting the null hypothesis. Meanwhile, the researchers use their expertise tointerpret the patterns of influences on export performance for each factor. Inthis way, it is hoped that this review will take advantages of the two approacheswhile reducing their limitations.
Results of the reviewGeneral assessment of the reviewed studiesTable I summarizes the 50 studies reviewed in this paper. This summary tableprovides information about each study in terms of the country (or countries) ofinvestigation, size of the sample, industry context of the study, type of firmstargeted, data collection method, whether an explicit theoretical basis isfollowed, whether hypotheses are explicitly advanced, analytical approach(es),unit of analysis, measures of export performance, and independent factorsinvestigated. In the following, each of these attributes is assessed:
Country (or countries) of investigation. While the USA remained as the mostresearched country in export performance studies, compared to earlier periodsas reported by Aaby and Slater (1989) and Chetty and Hamilton (1993), anincreasing number of export performance studies have been conducted in manyother countries. Out of the 50 studies reviewed here, 26 studies were conductedoutside the USA or involved non-US data. An important contribution has beenmade by European researchers from non-English-speaking countries whoconducted studies in the contexts of their home countries and published inEnglish-language journals: researchers such as Bijmolt and Zwart (1994),Holzmuller and Kasper (1991) and Madsen (1989). In addition to Europeancountries, developing countries in Asia and Latin America have also beenstudied. This is a clear indication that export performance research has gainedrecognition around the world. It can be expected that this trend will help enrichthe knowledge of the determinants of export performance.
Size of the sample. The size of sample used in the reviewed studies rangedfrom a low of 51 to a high of 728. The majority of studies reported sample sizesof over 100. With a reasonable number of independent variables and commonstatistical analysis, the sample size should be adequate for most studies.However, if the number of factors is large and sophisticated analysis is required,researchers are advised to make sure that their sample size is adequate for thestatistical analysis. For studies which reported small sample sizes, theinterpretation of their findings must be made with clear assessment of the typeof analysis adopted. Findings of a few studies appear to be suspect due to theirsmall sample sizes and multivariate approaches.
Industry context of the study. With the exception of six studies which focusedon only one manufacturing industry (e.g. machine tools), the vast majority ofthe reviewed studies involved samples drawn from multiple manufacturingindustries. Only three studies, Cavusgil and Kirpalani (1993), Singer andCzinkota (1994), and Sriram and Manu (1995), included in their samplesreselling and service firms in addition to manufacturers. While this may reflect
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pend
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Table I.Characteristics of thereviewed articles
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140
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233
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438
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165
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ear
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991)
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134
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scri
mfir
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ear
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ra, B
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116
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ions
firm
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clea
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994)
US
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mul
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logr
egfir
my
clea
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)U
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anuf
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rvey
anov
afir
mn
uncl
ear
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iki (
1994
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S99
one
man
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rvey
anov
afir
mn
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ear
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PRF
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DA
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erso
n, C
icic
, Sho
ham
(199
7)A
ustr
alia
181
serv
ices
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sion
firm
ycl
ear
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n/a*
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aven
, McC
ullo
gh,
US
118
rese
ller
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rvey
regr
essi
onfir
my
clea
rSU
CM
PBT
ansu
haj (
1994
)R
eid
(198
7)It
aly
77m
ult m
anuf
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rvey
regr
essi
onfir
mn
clea
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IC B
E E
O F
T F
CC
GE
S CH
TSa
mie
e, W
alte
rs (1
990)
US
145
man
uf/r
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ler
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rvey
t-tes
t/ch
isq
firm
yun
clea
rSA
L PR
FE
P E
OSc
hleg
elm
ilch,
Ros
s (1
987)
UK
51m
ult m
anuf
–su
rvey
t-tes
tfir
mn
uncl
ear
SAL
PRF
GRW
MIE
ME
ESe
ifert
, For
d (1
989)
US
65m
ult m
anuf
SMsu
rvey
anov
afir
mn
uncl
ear
SAT
SZ IC
EM
FCH
PM
ASh
oham
(199
6)U
S81
mul
t man
ufSM
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rvey
regr
essi
onfir
my
clea
rCO
ME
P PD
A P
CA P
MA
CH
ASi
nger
, Czi
nkot
a (1
994)
US
89m
an/r
esel
/ser
vSM
Lsu
rvey
chis
q/lo
greg
firm
ycl
ear
SUC
SZ IC
ME
C M
RU
Srir
am, M
anu
(199
5)U
S12
1m
an/r
esel
/ser
vSM
Lsu
rvey
regr
essi
onex
vent
nun
clea
rSU
CFC
C G
ES
PDA
PC
C PM
ACH
T D
MW
alte
rs (1
993)
US
141
mul
t man
uf–
surv
eyan
ova
firm
yun
clea
rSA
L PR
F G
RWE
PW
alte
rs, S
amie
e (1
990
US
145
mul
t man
ufSL
surv
eyt-t
est/
chis
q/re
gfir
my
clea
rSA
L PR
F G
RWSZ
EP
IO E
O F
T M
PA G
ES
MR
U P
DA
PD
SZo
u, A
ndru
s, N
orve
ll (1
997)
Colo
mbi
a51
mul
t man
ufM
Lsu
rvey
regr
essi
onfir
mn
clea
rSA
LPD
A P
CA P
MA
CH
AN
otes
:*se
e Fi
gure
1 fo
r th
e de
finiti
ons
of th
e fa
ctor
labe
ls;
** n
ot a
pplic
able
Table I.Continued
InternationalMarketingReview15,5
340
the importance of manufacturing exports in the world economy (Leonidou andKatsikeas, 1996), the generalizability of the findings to other industry contextsshould not be automatically assumed. Researchers should focus more on servicefirms in order to elucidate the specific problems posed by the uniquecharacteristics of services, such as intangibility.
Type of firms targeted. Out of the studies that reported the type of firmstargeted for investigation, the majority focused on small and medium-sizedfirms. This focus may reflect the perception that exporting by small andmedium-sized firms plays an important role in many economies. It also leads tolarger sampling frames (i.e. there are more small and medium-sized firms) andeasier identification of managerial factors (i.e. small and medium-sized firmsare less diversified). While some studies included large firms in their samples,very few studies compared large firms with small and medium-sized firms interms of the determinants of export performance. Those studies that didcompare firms of different sizes (e.g. Cavusgil and Kirpalani, 1993; Culpan,1989; Madsen, 1989; Samiee and Walters, 1990) reported few conclusivefindings. Thus, as noted by Axinn (1994), it remains largely unclear whether thedeterminants of export performance are different between large firms and smallor medium-sized firms.
Data collection method(s). The majority of studies reviewed here used mailsurvey for data collection. Only a tenth of the studies used personal interviewsand only two studies were based on secondary data. It can be concluded thatmail survey is the dominant method for data collection in export performanceresearch. This high degree of conformity in data collection methods is in sharpcontrast to the glaring lack of agreement about the export performancemeasures and the potential determinants of export performance. Given thecurrent status of the literature, this conformity is a welcoming feature, sincedifferent findings could be more readily attributed to differences in measures asopposed to differences in data collection methods.
Theoretical basis adopted. Only a few studies have built upon an explicittheoretical basis. Nevertheless, quite a few studies have made a conscious effortto derive their research hypotheses with clear reference to some theoretical andconceptual frameworks, such as the strategy-structure-performance paradigm.While the trend toward more theoretical reasoning is encouraging, the literaturestill has a long way to go before reaching theoretical maturity. In fact, about halfof the studies reviewed here did not contain theoretical reasoning in developingthe research questions or hypotheses. This is somewhat surprising given thefact that Aaby and Slater (1989) had proposed a “strategic management model”of export performance, and Cavusgil and Zou (1994) had provided a broadconceptual framework that delineates the relationships between the internaland external factors, export marketing strategy, and export performance. Itappears that researchers need to be more conscious about the theoretical logicwhen conducting their studies.
Use of research hypotheses. Nearly half of the reviewed studies includedexplicit testing of research hypotheses. Nevertheless, there were still many
Determinants ofexport
performance
341
studies that were anecdotal and/or exploratory in nature. Given the volume ofpublications on export performance in the past three decades, it is intriguingthat so many studies are still exploratory in nature. In many cases, a prioriexpectations or hypotheses should have been available to researchers. Whilerecognizing that some of these studies were conducted in countries other thanthe USA, where circumstances may make it difficult to directly apply US-basedknowledge, researchers should build their studies on previous contributions,whenever available, so that incremental progress of knowledge can be realized.
Analytical approach. While regression was the most popular analyticalapproach adopted by researchers, a diverse set of approaches were also used,such as the t-test and chi-square test, ANOVA, discriminant analysis, loglinearmodel, and structural equation modelling. The popularity of the regressionapproach could be both the cause and the result of researchers’ assumption thatall potential factors influence export performance in the same way. There wasvery little distinction between direct effects and indirect effects. Thisassumption is obviously inconsistent with, for example, the theoreticalframeworks advanced in Aaby and Slater (1989) and Cavusgil and Zou (1994),in which strategy factors mediate the effect of firm characteristics on exportperformance. Only five studies (Axinn and Thach, 1990; Bijmolt and Zwart,1994; Cavusgil and Zou, 1994; Koh, 1991; Naidu and Prasad, 1994) used exportstrategy variables as mediators in models of export performance. Whenindirect effects are present, it is inappropriate to introduce all independentvariables into a regression equation. To develop better theory in exportperformance research, researchers need to combine regression analysis withmore sophisticated approaches such as path analysis and structural equationmodeling, so that both direct and indirect effects can be investigated.
Unit of analysis. Cavusgil and Zou (1994) and Cavusgil and Kirpalani (1993)advocated that the proper unit of analysis in export performance researchshould be the export venture: a product and a market combination. However,the majority of studies reviewed here still used the firm as the unit of analysis,and some studies never made their unit of analysis clear. Firm level studies maybe appropriate for small firms that often have only one product line.Nevertheless, using the firm as the unit of analysis can result in inaccuratemeasures of strategy and performance variables in studies that target mediumand large firms with diversified business portfolios (Cavusgil and Zou, 1994).
Measures and determinants of export performanceMeasures of export performance. There is still no agreement on how to measureexport performance, though several broad approaches have been advocated(e.g. Cavusgil and Zou, 1994; Schlegelmilch and Ross, 1987; Walters and Samiee,1990). Researchers continue to use unique names to label their exportperformance measures, resulting in dozens of such names (see Matthyssensand Pauwels, 1996, for an excellent review of export performance measures).This is detrimental to the advancement of the literature as it makes it hard tocompare and contrast the findings from different studies. In this review,
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consistent with Madsen (1987) and Matthyssens and Pauwels (1996), allmeasures of export performance are grouped into seven categories,representing financial, nonfinancial and composite scales (see Figure 1).
The “sales” category includes measures of the absolute volume of exportsales or the export intensity. The “profit” category consists of absolutemeasures of overall export profitability and relative measures such as exportprofit divided by total profit or by domestic market profit. While the “sales” and“profit” measures are static, the “growth” measures refer to changes in exportsales or profits over a period of time. Compared to financial measures, which aremore objective, the non-financial measures of export performance are moresubjective. The “success” category comprises measures such as the managers’belief that export contributes to a firm’s overall profitability and reputation (e.g.Raven et al., 1994); “satisfaction” refers to the managers’ overall satisfactionwith the company’s export performance (e.g. Evangelista, 1994); and “goalachievement” refers to the managers’ assessment of performance compared toobjectives (e.g. Katsikeas et al., 1996). Finally, “composite scales” refer tomeasures that are based on overall scores of a variety of performance measures.Export sales, profits, and composite scales are probably the most frequentlyused measures of export performance (see Table I), despite recentrecommendations for using more perceptual measures of overall export successor success in achieving organizational goals (e.g. Cavusgil and Zou, 1994;Matthyssens and Pauwels, 1996).
Independent factors/variables investigated. A glaring problem of the exportperformance studies reviewed here is the multiplicity of factors/variablesproposed by researchers to influence export performance, the large number ofways in which the factors are measured, and the lack of a consistent theoreticalframework or logic to guide the choice of independent factors. The result ofthese problems is a sea of complex, confusing and conflicting findings. Toorganize the discussion of the review findings, a 2 × 2 table is used to classifyvarious determinants of export performance based on two dimensions: internalvs external and controllable vs uncontrollable (see Figure 1).
Classifying the determinants of export performance into internal andexternal factors is theoretically justified as the two categories correspond todifferent theoretical bases. Specifically, internal determinants are justified bythe resource-based theory, while external determinants are supported by theindustrial organization theory. The resource-based theory conceives a firm as aunique bundle of tangible and intangible “resources” (assets, capabilities,processes, managerial attributes, information, and knowledge) that arecontrolled by a firm and that enable it to conceive and implement strategiesaimed at improving its efficiency and effectiveness (Barney, 1991; Daft, 1983;Wernefelt, 1984). The resource-based theory contends that the principaldeterminants of a firm’s export performance and strategy are the internalorganization resources (Barney, 1991; Collis, 1991). In contrast, the industrialorganization (IO) theory argues that the external factors determine the firm’sstrategy, which in turn determines economic performance (Scherer and Ross,
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Figure 1.Classification of the
dependent and independent factors
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344
1990). The logic is that the external environment imposes pressures to which afirm must adapt in order to survive and prosper (Collis, 1991). Following the IOtheory, the external factors and firm’s export strategy are the primarydeterminants of export performance. The classification of determinants ofexport performance into controllable and uncontrollable factors, while lackingtheoretical foundation, has strong practical relevance to both researchers andmanagement. Marketing models often make such a distinction. For example,Bilkey (1987) advanced a “theory of export marketing mix” that distinguishesamong controllable factors, short-run uncontrollable factors, and uncontrollablefactors. For studies that focused on mostly controllable factors as determinantsof export performance, an implicit assumption is made that managers can takecharge in affecting their firms’ export performance. In contrast, studies thatfocus exclusively on uncontrollable factors essentially portrayed a fatalisticview of exporting. Therefore, discussing the findings of this review along theinternal vs external and controllable vs uncontrollable dimensions istheoretically sound and practically significant.
In order to classify the factors within the proposed framework, the broadcategories of factors identified by previous theoretical frameworks (e.g. Aabyand Slater, 1989; Da Rocha and Christensen, 1994) are followed. These includeexport marketing strategy, managers’ attitudes and perceptions, managers’characteristics, firm characteristics and competencies, industry, and foreignand domestic market characteristics. Using the 2 × 2 table described above, thethirty-three independent factors were analyzed and placed into the appropriatecells. While the internal/external classification is clear, the controllable/uncontrollable classification takes into consideration as well short-runcontrollability (see Bilkey, 1987).
The effects of independent factors on export performanceBased on the vote-counting method described above, the results of this revieware summarized in Table II. Compared to the tabulation that Chetty andHamilton (1993) presented, Table II has a major distinctive feature. Chetty andHamilton grouped all measures of export performance into a single category.As a result, their tabulation contains only the total number of studies thatfound, for a particular independent factor, a significant positive effect, asignificant negative effect, or a nonsignificant effect on export performance. Butit can not be known whether the effect of the factor is on export sales, or exportprofits, or other specific measures of export performance. In contrast, in thisreview, export performance is classified into seven different measures, and theeffects of an independent factor on each of the seven export performancemeasures are presented in Table II. This should offer a clearer picture about theeffects of independent factors on various measures of export performance.
The single most important set of determinants of export performance falls inthe cell of internal-controllable factors. This finding is consistent with thosereported by Madsen (1987), Aaby and Slater (1989), and Chetty and Hamilton(1993). The prevalence of controllable factors suggests that most researchers
Determinants ofexport
performance
345
hold the view that export performance is under the control of the firm and itsmanagement. Thus, not only should better export performance be attributed tomanagement’s superior work, but poor export performance should be blamedupon the management as well. The number of reported findings on theinfluence of uncontrollable environmental factors is the lowest. It seems that thelack of emphasis on the environment, as noted by Madsen (1987), is stillcharacterizing the export performance studies in the last decade. Also, internaluncontrollable factors have received less attention from researchers than thecontrollable factors. The view that export performance could be attributed touncontrollable circumstances seems to have limited support in the literature. Ascan be seen, the cell “external/controllable” is empty, reflecting the fact that thestudies reviewed here had not looked into such factors yet to see if they are atall relevant.
Internal-controllable factorsThere are basically two types of internal and controllable factors. The first typeis associated with aspects of a firm’s export marketing strategy. Frequentlystudied strategy factors include product adaptation, product strength,promotion adaptation, promotion intensity, price adaptation, competitivepricing, channel relationships, and type of channels. Export planning andorganization variables have also been included in this set of factors. The secondtype is related to the attitudes and perceptions of management. These include,among others, management’s international orientation, management’s exportcommitment, management’s perceived export advantages, and management’sperceived barriers of exporting.
Export marketing strategy. Perhaps rightfully, factors related to a firm’sexport marketing strategy have received considerable research attention. Whilenot totally clear cut, some conclusions can be derived based on Table II. First,export planning is found to be a consistent determinant of export sales and thecomposite measure of export performance, and a predictor of export profits andexport growth. The few negative findings reported may be explained on thebasis of increased costs of export planning in specific situations (e.g. Katsikeaset al., 1996). This finding, which is consistent with that of Aaby and Slater(1989), underscores the importance of systematic planning in export operations.Second, a good export organization seems to pay off to firms in terms of sales,profits, and satisfaction. However, some studies found the effect of this factornot significant. Third, the effect of a firm’s general exporting strategy, in termsof being a first mover or a follower, using a concentration or diversificationstrategy, etc., is mostly insignificant, which is similar to the finding reported byMadsen (1987). This may suggest that the type of exporting strategy per sedoes not necessarily affect export performance. Multiple strategic approachesto exporting may be successful if they fit the particular circumstances of exportoperations. Fourth, consistent with Madsen (1987), a firm’s utilization ofinternational marketing research positively affects export sales, growth, andcomposite measures of export performance. But one study, Walters and Samiee
Dep
ende
nt v
aria
bles
: exp
ort p
erfo
rman
ceN
o.Sa
les
Prof
itG
row
thSu
cces
sSa
tisfa
ctio
nG
oal a
chiv
Com
posi
teTo
tal
Inde
pend
ent v
aria
bles
stud
ies
+–
0+
–0
+–
0+
–0
+–
0+
–0
+–
0+
–0
CI
Exp
ort m
arke
ting
stra
tegy
ON
Firm
gen
eral
exp
ort s
trat
egy
134
–8
1–
75
–4
–1
––
––
2–
1–
––
12
120
NT
Mar
ketin
g re
sear
ch
TE
utili
zatio
n7
3–
1–
12
1–
2–
–1
––
–2
––
––
–6
16
RR
Exp
ort p
lann
ing
168
12
31
72
–3
––
–1
––
11
–4
––
19
312
ON
Exp
ort o
rgan
izat
ion
129
–3
2–
5–
–1
––
–1
–2
––
21
––
13
013
LA
Prod
uct a
dapt
atio
n14
31
42
–4
2–
21
––
––
––
–1
41
212
2
13L
LPr
oduc
t str
engt
hs15
51
73
110
1–
5–
––
––
––
–1
4–
413
2
27A
Pric
e ad
apta
tion
93
12
2–
21
––
––
––
––
––
–1
–2
7 1
6B
Pric
e co
mpe
titiv
enes
s7
1–
1–
–2
1–
11
––
––
––
–1
––
23
07
LPr
ice
dete
rmin
atio
n5
––
2–
–8
––
––
––
––
––
–1
––
–0
011
EPr
omot
ion
adap
t6
1–
1–
––
––
1–
1–
1–
––
––
12
–3
32
Prom
otio
n in
tens
ity10
51
13
13
1–
4–
––
5–
2–
–1
1–
–15
2
11Ch
anne
l ada
ptat
ion
41
–3
–1
1–
–1
––
––
––
––
–1
–1
2 1
6Ch
anne
l rel
atio
nshi
ps8
4–
52
–6
2–
6–
––
––
––
––
1–
–9
017
Chan
nel t
ype
113
43
2–
3–
–2
––
––
––
––
––
––
5 4
8
Man
agem
ent a
ttitu
des
and
perc
eptio
nsM
anag
emen
t exp
ort
com
mitm
ent
104
–1
2–
–3
––
1–
–2
–1
1–
–2
––
15
02
Inte
rnat
iona
l ori
enta
tion
103
–1
1–
12
–1
––
––
––
––
14
–2
10
06
Exp
ort m
otiv
atio
n (p
roac
tive)
51
––
––
1–
–1
––
––
–1
––
1–
––
1 0
4M
anag
emen
t’s p
erce
ived
exp
adva
ntag
es9
6–
33
–1
2–
1–
––
––
––
–1
––
211
0
8M
anag
emen
t’s p
erce
ived
exp
barr
iers
9–
24
1–
––
1–
–1
––
––
––
1–
24
1 6
9
(Con
tinue
d)
Table II.Summary of thefindings on the directinfluence of independentfactors on exportperformance
Dep
ende
nt v
aria
bles
: exp
ort p
erfo
rman
ceN
o.Sa
les
Prof
itG
row
thSu
cces
sSa
tisfa
ctio
nG
oal a
chiv
Com
posi
teTo
tal
Inde
pend
ent v
aria
bles
stud
ies
+–
0+
–0
+–
0+
–0
+–
0+
–0
+–
0+
–0
UI
Man
agem
ent c
hara
cter
istic
sN
NM
anag
. int
erna
tiona
l exp
erie
nce
116
13
2–
25
–2
––
––
–1
––
–2
–2
15
110
CT
Man
ag. e
duca
tion/
expe
rien
ce13
2–
92
–3
2–
4–
––
––
2–
––
53
211
3
20
OE
Firm
cha
ract
eris
tics
and
NR
com
pete
ncie
sT
NSi
ze22
22
8–
32
1–
5–
–1
1–
11
–3
4–
39
523
RA
Firm
’s ag
e6
–2
1–
––
––
––
––
––
––
––
–1
20
33
OL
Firm
’s in
tern
atio
nal c
ompe
tenc
e13
31
21
2–
3–
––
–1
1–
12
–2
2–
112
3
7L
Firm
tech
nolo
gy11
3–
51
–2
11
3–
––
––
––
––
2–
17
111
LFi
rm c
hara
cter
istic
s5
21
1–
––
––
––
––
––
––
––
2–
–4
11
AFi
rm c
apab
ilitie
s/co
mpe
tenc
ies
134
14
1–
42
–2
––
13
–4
3–
17
25
20
321
B LE
Indu
stry
cha
ract
eris
tics
EX
Indu
stry
tech
nolo
gica
l int
ensi
ty4
1–
––
––
––
1–
––
––
––
––
3–
–4
01
TIn
dust
ry in
stab
ility
22
–1
––
––
––
––
––
––
––
––
––
2 0
1
EE
xpor
t mar
ket c
hara
cter
istic
s R
Exp
ort m
arke
t com
petit
iven
ess
3–
–3
––
2–
––
––
––
––
––
–1
––
1 0
5N
Exp
ort m
arke
t att
ract
iven
ess
83
14
32
2–
–2
––
––
––
––
2–
–2
6 3
12A
Exp
ort m
arke
t bar
rier
s5
12
3–
–3
–1
1–
––
––
––
––
––
11
38
LD
omes
tic m
arke
t cha
ract
eris
tics
Dom
estic
mar
ket
4–
2–
––
1–
–2
––
––
––
1–
31
––
2 2
6
Table II.Continued
InternationalMarketingReview15,5
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(1990), reported a negative effect on export profits, and several others reportedinsignificant effects.
With regard to the marketing mix variables, several findings are in order.First, product adaptation and product strength are frequently studied byresearchers. Several studies concluded that these two factors are importantdeterminants of export sales, profits, and growth. This could probably beexplained by the fact that an adapted product can satisfy foreign consumers’needs and preference better and that a strong product allows a firm to transferit more easily to the foreign markets. Other studies found insignificant effects ofproduct adaptation and product strength, while a few studies reported negativeeffects. Nevertheless, the negative correlations may be explained by the cost ofadaptation (e.g. “localized after-sale service” in Kaynak and Kuan, 1993). Hence,these factors deserve further research attention, though their overall effectsseem to be positive. Second, the effects of promotion adaptation on variousmeasures of export performance appear mixed, whereas promotion intensityseems to have positive effects on export sales, export profits, and satisfactionwith export. A possible explanation for the mixed effects of promotionadaptation is that researchers measured the extent of promotion adaptation asopposed to the extent to which the adapted promotion met foreign consumers’preferences. Third, while the effects of channel adaptation and channel type onexport performance are mixed, channel relationship, generally expressed asdealer/distributor support, motivation, and involvement, emerges as a keydeterminant of export sales, profits, and growth. This is consistent withMadsen’s (1987) finding. Fourth, price adaptation seems to positively influenceexport sales, export profits, and export growth in some studies, but isinsignificant in others. The effect of price competitiveness is mostlyinsignificant, with the exception of three studies that reported positive effect.The price determination method was found to be an insignificant factor in fivestudies that looked at this factor. The weak and uncertain findings on pricingare in contrast with the medium positive effect size concluded by Chetty andHamilton (1993). Given the importance of export pricing as the only marketingmix variable that generates revenue, more research needs to be done on theeffect of price related factors.
Management’s attitudes and perceptions. The attitudes and perceptions ofmanagement have been frequently cited as important determinants of exportperformance (for an excellent review of the effect of managerial factors, seeLeonidou et al., 1998). Several conclusions can be drawn from Table II regardingthe effects of these factors. First, with almost no exception, management’sexport commitment has emerged as one of the key determinants of exportperformance, regardless of performance dimension. This finding is consistentwith all previous reviews and reinforces Cavusgil and Zou’s (1994) conclusionthat high management commitment allows a firm to aggressively go after theexport market opportunities and pursue effective export marketing strategiesthat improve export performance. Second, international orientation is found tobe a very consistent predictor of good export performance, measured in
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financial terms or as a composite. Presumably, an internationally oriented firmcan better identify and benefit from emerging international opportunities andavoid threats. Third, management’s perceived export advantages (e.g. perceivedimportance or profit contribution which exporting brings to the firm), seem topredict well export sales, profits, and growth, whereas management’s perceivedexport barriers (e.g. perceived risks, costs, or complexity of exporting) eitherresult in low export sales, slow export growth, and low perceived exportsuccess, or fail to be significant predictors of export performance. Thesefindings suggest that it is important for the management to focus on theadvantages rather than barriers to exporting, and keep a positive attitudetoward the outlook of export operations. Overall, consistent with theconclusions of Aaby and Slater (1989) and Chetty and Hamilton (1993), factorsrelated to management’s attitudes and perceptions seem to be potentdeterminants of the financial measures of export performance such as exportsales, profits, and growth. In addition, export commitment also influences non-financial measures of export performance, including perceived export success,satisfaction, and goal achievement.
Internal-uncontrollable factorsThe internal-uncontrollable factors are those characteristics of a firm and itsmanagement that can not be readily changed in the short run. It should beacknowledged that in the long run many internal factors could be changed. Forexample, a firm can improve its international competence in the long run byhiring more competent managers or developing competence internally. But afirm can not control the level of its competence in the short run.
Management characteristics. Management’s international experience seemsto have a positive effect on export sales, export profits, export growth, and thecomposite measure of export performance. This is perhaps due to the fact thatmanagers’ international experience helps a firm to identify and leverage on theinternational opportunities while avoiding international threats. Only onestudy, Das (1994), found that managers of successful exporting firms have lesspast experience in exporting and less foreign experience than managers ofunsuccessful firms. However, since Das (1994) focused on firms operating inturbulent environments, it could be that the unique context of the researchcontributed to its unique findings. It should also be noted that some studiesfound this factor insignificant. Concerning managers’ levels of formal educationand general business experience, about a third of the studies found that this hasa positive effect on export sales, growth, and profits. But other studies foundthat it has an insignificant effect, and a few others reported a negative effect.Overall, it can be concluded that firms’ export performance benefits fromhaving educated and internationally experienced managers.
Firm characteristics and competencies. Firm competencies, in terms of bothinternational competence and overall business competencies (e.g. strong marketposition, strong human resources, strong functional capabilities) appear to beimportant determinants of export performance. This finding is consistent with
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those of previous reviews (e.g. Aaby and Slater, 1989; Madsen, 1987). However,it is necessary to note the relatively large number of non-significant findingsand the few negative effects reported. For example, Kaynak and Kuan (1993)and Louter et al. (1991) reported a negative impact of the firm’s number of yearsin exporting on export profitability and sales. The technology level is reportedto have a positive effect on export performance in six studies, but anonsignificant effect or even a negative effect in five others. Madsen (1987) andAaby and Slater (1989) noted that the effect of the technological intensity of thefirm on export performance is uncertain. However, Chetty and Hamilton (1993)found a positive effect of firm technology on export performance. It appearsthat more attention should be given to the context in which the technology levelis studied.
Firm size, the most researched independent variable, has mixed effects. Thisconclusion is in contrast to Chetty and Hamilton’s (1993) finding of a mediumpositive effect of firm size on export performance, but is in line with theconclusions drawn by Madsen (1987) and Aaby and Slater (1989). However, it isinteresting to note that most positive effects are found when size is measured bytotal firm sales, while some negative effects, especially on export profit, arefound when it is measured by number of employees (e.g. Kaynak and Kuan,1993). A firm’s general characteristics, in terms of life cycle stage, nature ofproduct (consumer vs industrial), or nature of the firm (manufacturer vsintermediary) appear to have a significant effect on export sales. But only fivestudies looked at this factor, suggesting that more research is needed. Finally, afirm’s age, expressed as number of years in business, appears to have either anegative effect (Bodur, 1994; Das, 1994) or an insignificant effect on exportperformance. While this may suggest that younger firms are more likely to besuccessful exporters, the conclusion should be drawn with caution as only sixstudies looked at this factor. Overall, with the exception of a few factors, theeffects of most internal-uncontrollable factors are mixed. This is consistent withMadsen’s (1987) conclusion that, compared to the internationalization literaturewhere organization-structure factors are very important, in the export-performance literature such factors have only limited explanatory power. Moreresearch seems to be warranted before definite conclusions can be drawnregarding the effects of internal-uncontrollable factors.
External-uncontrollable factorsThe external-uncontrollable factors have received the least attention fromresearchers. Only 18 out of the 50 reviewed studies addressed the influence ofexternal environment and most of them reported non-significant findings. Thismay be the result of previous researchers’ use of the entire firm as the unit ofanalysis. When the firm’s total export is the focus, the environment is often hardto define clearly, because the same firm can export to many markets withdifferent characteristics. Most studies that investigated the effects of external-uncontrollable factors assessed the effects of these factors on financial
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measures of export performance such as export sales, profits, and growth.Several conclusions can be drawn from Table II.
Industry characteristics. The four studies that addressed industry’stechnological intensity or “manufacturing complexity” reported a positiveinfluence on export performance (Cavusgil and Zou, 1994; Holzmuller andKasper, 1991; Holzmuller and Stottinger, 1996; Ito and Pucik, 1993). While itseems that firms in more complex and technologically oriented industries havebetter export performance, more research is needed before drawing definiteconclusions. Surprisingly, industry instability (operationalized as rate ofchange in technology, predictability, riskiness) is found to positively influenceexport sales (Das, 1994; Lim et al., 1996). Again caution should be appliedbecause only two studies looked at this factor.
Export market characteristics. Out of the three studies that addressed exportmarket competitiveness, only one (i.e. Cavusgil and Zou, 1994) found asignificant indirect effect on export performance. Further, while some studiesfound that export market attractiveness (economic development, demandpotential, etc.) has a positive effect on export performance, others reported anegative effect (e.g. Kaynak and Kuan, 1993) or an insignificant effect for thisfactor. This inconclusiveness was also observed in Madsen’s (1987) review.Finally, in contrast to Madsen’s (1987) observation, most studies reported thatexport market barriers (trade barriers, physical and psychological distance) arenot a significant predictor of export performance. Perhaps firms can overcomesuch barriers by pursuing effective marketing strategies.
Domestic market characteristics. The four studies that researched the effectof domestic market forces reported mixed findings. For example, Katsikeas etal. (1996) reported a positive effect on export performance for the nationalexport policy, but a non-significant effect for domestic market pressure anddomestic currency devaluation. Madsen (1989) reported a negative influence ofdomestic market attractiveness on export sales. It seems that the relationshipbetween domestic market conditions and export performance needs to befurther researched.
Discussion and future research directionsSignificant progress has been made in the last decade in developing bettertheory and knowledge of the determinants of export performance. A key pointto make here is that, compared to earlier studies reviewed by Aaby and Slater(1989) and Chetty and Hamilton (1993), more studies in the last decade haveincorporated some theoretical reasoning in developing their research questionsand hypotheses. Indeed, several studies (e.g. Atuahene-Gima, 1995; Cavusgiland Zou, 1994; Diamantopoulos and Schlegelmilch, 1994; Holzmuller andStottinger, 1996; Louter et al., 1991) have used explicit conceptual models toguide their hypothesis development. These developments in the last decadehave significantly strengthened the theoretical foundation of exportperformance research, legitimizing the academic inquiry in the field ofexporting. Now, researchers will be able to build their studies upon some
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theoretical foundations. Therefore, export performance research has made abig step forward in the last decade toward developing mature theories.
Despite the positive progress in theory development, the export performanceliterature is still plagued by several major problems. First, several conceptualframeworks developed so far are competing explanations for exportperformance. For example, based on industrial organization theory, Cavusgiland Zou’s (1994) framework contends that export performance is determinedmainly by export marketing strategy and some internal organizational factorssuch as export commitment and international experience, and that externalfactors and other internal factors have only indirect effects on exportperformance through their influence on export marketing strategy. In contrast,the frameworks of Donthu and Kim (1993), Holzmuller and Kasper (1991),Louter et al. (1991), and Madsen (1989) posit direct effects for all potentialdeterminants of export performance, external or internal. These differencesneed to be addressed in future research, conceptually and empirically, to reducethe confusion in the literature.
Another major problem of the literature is the conceptualization andmeasurement of export performance. Dozens of names have been used byresearchers to label export performance and a wide variety of measures havebeen used. In addition, many studies are focused on a narrow view of exportperformance (export sales, for example), while others have used non-financialmeasures. This lack of agreement on the conceptualization and measurement ofexport performance makes it very difficult, if not impossible, to compare thefindings from different studies. Theory development is certainly hampered bythis weakness of the literature. Future researchers are strongly encouraged todevelop a consistent conceptualization and measurement of exportperformance and follow with it in empirical studies. Moreover, it is veryimportant to develop a cross-culturally consistent conceptualization andmeasurement of export performance, given the fact that half of the studiesreviewed were conducted outside the USA. A notable effort in this regard is Zou et al.’s (1998) work on developing a cross-nationally consistentconceptualization and measurement of export performance, namely theEXPERF scale.
Still another major problem is the lack of agreement on the relevantdeterminants of export performance and their measurement. Hundreds ofnames have been used in the last decade to label a diverse set of independentvariables, and numerous measurement schemes have also been used. Like theproblem with export performance, the lack of agreement on the domains andmeasurement of independent variables also hampers the theory development inexport performance literature. Future researchers are again stronglyencouraged to develop some consistency in conceptualizing and measuringindependent variables. A potentially fruitful direction to take is to use theindependent factors used in this review, as well as those in Aaby and Slater(1989), to group independent variables, develop clear conceptual domains forthe selected factors, develop sound schemes to measure the factors, and assess
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the reliability, validity, and cross-cultural consistency of the measures. Once asound conceptualization and measurement of export performance andindependent factors is developed, researchers are urged to follow it in theireffort to develop and test theory of export performance in various industry andcountry contexts.
Several other problems of the literature need to be addressed by futureresearchers as well. First, the issue of the unit of analysis is an important one.When diversified large firms and medium-sized firms are targeted byresearchers, it is very important that the one-product-one-market exportventure be used as the unit of analysis in data collection, because in such casesfirm-level investigation would inevitably lead to confounded and inaccuratemeasures. Second, the size of the firm must be controlled in data collection orexplicitly included as a covariate in analysis. Leaving firm size uncontrolled orout of analysis would introduce biases into the results, since success factors forlarge firms may be different from those for small and medium-sized firms.Third, it is recommended that, in addition to following more consistentconceptualization and measurement of export performance and independentfactors, future researchers adopt a multivariate data analysis techniquewhenever feasible and report full results including effect size, variances, teststatistics, and sample size. In this way, weak analysis can be avoided and theknowledge can be more readily summarized by rigorous meta-analysis in thefuture. These steps are also key to enhancing the academic status of the exportinquiry. Finally, while it is encouraging that an increasing number of studieshave been conducted outside the USA, more work needs to be doneinternationally. Preferably, cross-cultural studies should be conducted so thatthe generalizability of theories of export performance can be assessed. It mightalso be interesting to explore the possibility of explicitly incorporating culturalvariables and socioeconomic variables into theory.
Building on the significant progress made in the last decade in the exportperformance literature, research on the determinants of export performanceshould and could achieve a greater advancement toward mature theory in thenext few decades. But the aforementioned problems must be addressed byresearchers before the field can reach the theoretical maturity that everyrespectable academic field is known for.
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