Psychic Distance, International Commitment, Firm Experience, International Marketing Strategy, and Export Venture Success: An Empirical Study of Austrian SMEs

Abstract

This study examines the influence of firm-specific factors, such as international marketing strategy, firm experience, psychic distance, and international commitment, on export performance in Austrian small and medium-sized enterprises (SMEs). Using survey data from 220 export ventures, this paper tests causal-effect-relationships in the proposed conceptual model, using structural equation modelling. The results of the study show that there is a twofold influence of psychic distance, commitment, and firm experience. There is evidence that this relationship is an inverted u-curve. In addition, we found that competition in foreign target markets exerts a positive effect on the adaption of marketing strategies. The results confirm that psychic distance has an impact on all measured dimensions of export success in SMEs. We found evidence that the degree of product adaptation positively influences the overall success and the profitability of export ventures, whereas the degree of price adaptation is positively related to sales growth and profitability. Our study indicates that SMEs are more successful in early stages of exporting and become less successful in later stages.