Impact of Institutional Support on Export Performance

Mário Nuno Mata,Mohammad Falahat,João Xavier Rita,Anabela Batista Correia

doi:10.3390/economies9030101

Abstract

This paper examines institutional support (financial and marketing support) on export-oriented firms’ performance or so-called born globals. We develop a model to address how financial and marketing support can help young entrepreneurial firms to overcome the liability of newness and smallness in gaining competitive capabilities. Using a quantitative method, data were collected from 217 manufacturers and service sectors in Malaysia, an emerging Southeast Asian market. The results suggest that government assistance in marketing leads to competitive capabilities and export performance; however, financial support neither contributes to competitive capabilities nor export performance. We found the significant role of competitive capabilities as a mediator in enhancing the relationship between marketing support and export performance. Practical implications drawn from this result can be offered as guidelines for the policymakers in supporting young entrepreneurs that lead to competitive capabilities and superior performance.

Highlights

Due to globalisation, small and medium enterprises (SMEs) are able to internationalise from an early point
We conclude that marketing assistance leads to competitive capabilities in the export market (Indrawati et al 2018), we propose the following hypothesis: Hypothesis 4 (H4): Marketing support positively influences the competitive capabilities of SMEs towards internationalisation
Marketing support was found to be positively related to export performance (H3)

Summary

Introduction

Small and medium enterprises (SMEs) are able to internationalise from an early point. A growing percentage of SMEs’ income is derived from the overseas market. Those SMEs looking for internationalisation need to build up their own distinctive, unique and dynamic competencies to gain distinctive competitive strategies that enable them to compete against other firms, when confronting bigger and better-enriched multinational enterprises (MNEs). Maintaining competitiveness and expanding business internationally are getting challenging especially in the global market. This competition in the worldwide markets and rising expectations from the global customers will continue to drive transformation in SMEs to become more technology-savvy, efficient and resilient, and later sustain its momentum (De Chiara and Minguzzi 2002)

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Discussion

Conclusion