THE EFFECT OF EXPORT PROMOTION PROGRAM TOWARDS SMALL-MEDIUM ENTERPRISES’ EXPORT PERFORMANCE: A GOVERNANCE PERSPECTIVE
DOI:
https://doi.org/10.15282/jgi.7.1.2024.9722Keywords:
Export promotion program, Export performance, SMEs, Network roleAbstract
This paper investigates the effectiveness of export promotion programs (i.e., information, experiential, and financial supports) towards small-medium enterprises (SMEs) export performance. The research framework is guided by the Research-Based View. A sample of 116 Malaysian small and medium size exporter firms was tested by using the model. The data were analyzed through a partial least square structural equation modelling approach. Study results show that all three supports in the export promotion program improve SMEs’ export performance with the mediating effect of network role. The findings show that the implication of the impact of export promotion programs on export performance is justified. Besides, it also validates the importance of networking in using support from government agencies. The findings can also help SMEs engage with foreign buyers or trade organizations to profit from trade fairs and trade exhibits, promoting promotion programs on a global scale. Last but not least, government agencies can also strengthen international trade relations and foreign diplomacy for exporters to boost their trade competitiveness.
References
Arvis, J.F., Duval, Y., Shepherd, B. and Utoktham, C. (2013), Trade costs in the developing world: 1995 – 2010, Policy Research Working Paper, 6309
Ayob, A.H. and Freixanet, J. (2014), Insights into public export promotion programs in an emerging economy: the case of Malaysian SMEs, Evaluation and Program Planning, 46(2), 38-46
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
Bell, J.D., McNaughton, R., Young, S. and Crick, D. (2003), Towards an integrative model of small firm internationalization, Journal of International Entrepreneurship, 1(4), 339-62
Belloc, M. and Di Maio, M. (2011), Survey of the literature on successful strategies and practices for export promotion by developing countries, International Growth Centre Working Paper, 11(2), 4-8.
Belso-Martinez, J. (2006), Why are some Spanish manufacturing firms internationalizing rapidly? The role of business and institutional international networks, Entrepreneurship & Regional Development, 18(3), 207- 26.
Bernard, A. B., & Jensen, J. B. (2004). Why some firms export. Review of Economics and Statistics, 86(2), 561–569
Boehe, D. (2013). Collaborate at home to win abroad: How does access to local network resources influence export behaviour? Journal of Small Business Management, 51(2), 167–182.
Catanzaro, A. & Teyssier, C. (2021). Export promotion programs, export capabilities, and risk management practices of internationalized SMEs. Small Business Economics. 57 (3), 1479-1503.
Catanzaro, A., Messeghem, K., & Sammut, S. (2018). Effectiveness of export support programs: impact of the relational capital and international performance of early internationalizing small businesses. Journal of Small Business Management. 57(2), 436-461
Cheah, J., Leong, S.Y. & Fernando, Y. (2022), Innovation strategies and organizational performance: the moderating role of company size among small- and medium-sized companies, Benchmarking: An International Journal, Vol. ahead-of-print No. ahead-of-print.
Cheah, J. S., & Lim, K. H. (2023). Effects of internal and external corporate social responsibility on employee job satisfaction during a pandemic: A medical device industry perspective. European Management Journal. Vol. ahead-of-print No. ahead-of-print.
Crick, D. & Crick, J. (2014), The internationalization strategies of rapidly internationalizing high-tech SMEs: planned and unplanned activities, European Business Review, 26(5), 421-448.
Crick, D. & Lindsay, V. (2015), Service and service-intensive New Zealand internationalizing SMEs: managers’ perceptions of government assistance, Marketing Intelligence & Planning, 33(3), 366-393.
De Maeseneire, W., & Claeys, T. (2012). SMEs, foreign direct investment and financial constraints: the case of Belgium. International Business Review, 21(3), 408–424.
Diamantopoulos, A. & Winklhofer, H.M. (2001), Index construction with formative indicators, Journal of Marketing Research, 38(5), 269-77
Faroque, A. & Yoshi T., (2015). Export marketing assistance and early internationalizing firm performance Asia Pacific Journal of Marketing and Logistics, 27 (3), 421 - 443
Felzensztein, C., Ciravegna, L., Robson, P., & Amorós, J. E. (2015). Networks, entrepreneurial orientation, and internationalization scope: Evidence from Chilean small and medium enterprises. Journal of Small Business Management, 53, 145-160.
Gençtürk, F. & Kotabe, M (2001). The Effect of Export Assistance Program Usage on Export Performance: A Contingency Explanation. Journal of International Marketing. 9(2), 51-72
Haddoud, M., Jones, P., & Newbery, R. (2017). Export promotion programs and SMEs’ performance: Exploring the network promotion role. Journal of Small Business and Enterprise Development. 24(1), 68-87
Han, J. & Park, H. (2019). Sustaining small exporters’ performance: Capturing heterogeneous effects of government export assistance programs on global value chain informedness. Sustainability. 11(98), 1-24
He, X., & Wei, Y. (2013). Export market location decision and performance: The role of external networks and absorptive capacity. International Marketing Review, 30(6), 559–590.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2016). Testing measurement invariance of composites using partial least squares. International Marketing Review, 33(3), 405–431
Hormiga, E., R. M. Batista-Canino, & A. Sánchez-Medina (2011). The impact of relational capital on the success of new business start-ups, Journal of Small Business Management 49(4), 515–658.
Jalali, S.H. (2012), The effect of export promotion programs on export performance: evidence from Iranian food manufacturers, International Journal of Business and Globalisation, 9(2), 122-133.
Jordana, J., C. V. Martincus, & A. Gallo (2010). The Impact of Export Promotion Institutions on Trade: Is It the Intensive or the Extensive Margin? IDB Working Paper, n°. IDB-WP-199, August 2010.
Kim, J.J. & Hemmert, M. (2016), What drives the export performance of small and medium-sized subcontracting firms? A study of Korean manufacturers, International Business Review, 25(2), 511-521
Kontinen, T., & A. Ojala (2011). Network Ties in the International Opportunity Recognition of Family SMEs, International Business Review, 20(4), 440–453
Lages, C., Lages, C. R., & Lages, L. F. (2005). The RELQUAL scale: A measure of relationship quality in export market ventures. Journal of Business Research, 58(8), 1040–1048
Lages, L. F., & Montgomery, D. (2005). The relationship between export assistance and performance improvement in Portuguese export ventures: an empirical test of the mediating role of pricing strategy adaptation. European Journal of Marketing, 39(7–8), 755–784.
Lavie, D. (2006). The competitive advantage of interconnected firms: An extension of the resource-based view. Academy of Management Review, 31(3), 638–658.
Lederman, D., Olarreaga, M, & Payton, L. (2010). Export promotion agencies: Do they work? Journal of Development Economics. 91(2), 257-265
Lehrer, M. & Celo, S. (2017), Boundary-spanning and boundary-buffering in global markets: a German perspective on the internationalization of family firms, Review of International Business and Strategy, 27(2), pp. 58-67.
Leonidou, L. C., D. Palihawadana, and M. Theodosiou (2011). National Export- Promotion Programs as Drivers of Organizational Resources and Capabilities: Effects on Strategy, Competitive Advantage, and Performance, Journal of International Marketing 19(2), 1–29.
Leonidou, L.C., Samiee, S. and Geldres, V.V. (2015), Using national export promotion programs to assist smaller firm’s international entrepreneurial initiatives, in Pervez, NG and Kirpalani, V.H.M. (Eds), Handbook of Research on International Entrepreneurship Strategy: Improving SME Performance Globally, Edward Elgar Publishing, 239-252
Love, J. H., & Roper, S. (2015). SME innovation, exporting and growth: A review of existing evidence. International Small Business Journal, 33, 28–48.
Morgan, N.A., Katsikeas, C.S. and Vorhies, D.W. (2012), Export marketing strategy implementation, export marketing capabilities, and export venture performance, Journal of the Academy of Marketing Science, 40(2), 271-289.
Nalcacia, G., & Yagcib, M. (2014). The effects of marketing capabilities on export performance using resource-based view: assessment on manufacturing companies. Procedia-Social and Behavioral Sciences, 148,671–679.
Paul, J., Parthasarathy, S., & Gupta, P. (2017). Exporting challenges of SMEs: a review and future research agenda. Journal of World Business, 52(3), 327– 342.
Quaye, D. M., Sekyere, K. N., & Acheampong, G. (2017). Export promotion programmes and export performance: a study of selected SMEs in the manufacturing sector of Ghana. Review of International Business and Strategy, 27(4), 466-483.
Richter, N. F., Sinkovics, R. R., Ringle, C. M., & Schlagel, C. (2016). A critical look at the use of SEM in international business research. International Marketing Review, 33(3), 376–404.
Shamsuddoha, A.K., Ali, M.Y. and Ndubisi, N.O. (2009), A conceptualization of direct and indirect impact of export promotion programs on export performance of SMEs and entrepreneurial ventures, International Journal of Entrepreneurship, 13, 87-106, Special Issue
Sousa, C. M., & Bradley, F. (2009). Price adaptation in export markets. European Journal of Marketing, 43(3/4), 438-458.
Sousa, C. M. P., Martínez-López, F. J., & Coelho, F. (2008). The determinants of export performance: A review of the research in the literature between 1998 and 2005. International Journal of Management Reviews, 10(4), 343–374
Volpe, C. and Carballo, J. (2010). Beyond the average effects: The distributional impacts of export promotion programs in developing countries. Journal of Development Economics. 92(2), 201-214
Wang, G., W. Dou, W. Zhu, & Zhou (2015). The Effects of Firm Capabilities on External Collaboration and Performance: The Moderating Role of Market Turbulence, Journal of Business Research 68(9), 1928–1936.
Wernerfelt, B. (2010). Invited Editorial: The Use of Resources in Resource Acquisition, Journal of Management, 37(5), 1369–1373.
Williamson, N., Kshetri, N.B. and Wilkinson, T. (2011), Recent trends in export promotion in the United States, Marketing Management Journal, 21(2), 153- 166.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 The Author(s)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
