Do National Export Promotion Programs in Indonesia support export competitiveness?

Abstract

This study examines the influence of export promotion programs (EPPs) in Indonesia on companies' resources, capabilities, strategies, and competitiveness, and whether such programs positively impact export performance and finances. Using data from 204 exporting companies in Indonesia and the structural equation model for analysis, this study finds that participation in EPPs reinforces the organizational resources and exporting capabilities needed for developing successful export strategies. This allows for the creation of competitive advantages in export costs, product superiority, and effective distribution, which in turn increases performance in terms of market share and finance. The results also indicate that the effect of EPPs is relatively more significant on small companies and those with more export experience. They confirm that EPPs have the most significant impact on firms’ resources and capabilities, and that assistance programs that aim to improve organizational capabilities are needed to enhance marketing strategies. While innovative capabilities and business intelligence offer great potential to support export performance, EPP-type assistance programs have not been adequately developed in Indonesia.