Firm Export Research Articles

Exhibitors’ Performance at International Trade Shows: Does Export Firms’ Experience Matter?

A myriad of combinations of organizational characteristics is more likely to be successful than a limited number. To test this, we conducted an analysis comparing a variables’ single effect with the configurational effect identified using a fuzzy-set qualitative comparative analysis (fsCQA) of 75 exporting firms exhibiting at three different international trade shows (ITS) in 2018 and 2019. We observed that some dimensions of a firm’s experience, including the firm’s age and previous trade show participation were consistently sufficient for the firm’s sales-related activities, i.e. sales, feedback on new products, test new product concepts, and develop new product segments.

The Relationships among Related Party Transactions, Exports and Earnings Management in Korea

Purpose - We investigate the effects of exports and related party transactions on earnings management. In addition, we study their simultaneous multilateral effects on each other in as well as their long-term effects investigated with time lags. Design/Methodology/Approach - In this study, a merged data set of accounting, financial market, and export activities of 8,687 firms listed on Korea Exchange (KRX) from 2006 to 2018 is used. We collect data from TS 2000 database. Then, we formally test our hypotheses using fixed effects models (FEM) and simultaneous equation models (SEM). Findings - First, export firms have more severe earnings management than non-export firms. Second, earnings management has a positive effect on related party transactions for the non-export firms. Third, related party transactions for export firms have a negative effect on earnings management. Fourth, simultaneous equation models verified above mentioned conclusions. Fifth, the effects of earnings management on exports lasted for years while those of exports on earnings management lasted for years. However, the effects of related party transactions on both exports and earnings management lasted only for a year. Research Implications - Based on above findings, we can conclude that firms use exports and related party transactions for earnings management and that firms use related party transactions to manipulate exports of firms. Thus, traditional way of studying earnings management using discretionary accruals might shift focus to related party transactions, especially for export firms with subsidiaries abroad.

The internationalisation of Chinese firms: Impact of FDI experience on export performance

AbstractThis study investigates the relationship between firms’ export performance and prior investment experience in the corresponding country by using a novel dataset of Chinese firms. We find that a firm's export performance, in terms of value, quantity, unit price level and product varieties, is considerably better in destination countries where the firm has previously invested. The patterns are more pronounced when exporters are non‐state‐controlled or small‐sized firms. Our analysis also shows that such country‐specific outward foreign direct investment experience can facilitate firm exports by bridging country‐pair physical and cultural distances and overcoming contractual barriers in destination countries. The data further imply that the positive effect partly stems from the purpose of local production.

Are Political Factors More Relevant Than Economic Factors in Firm-Level Renewable Energy Technology Export? Evidence from Path Analysis

Renewable energy technology (RET) firms are key economic entities in the export of RET-related products and components, in which RET firms’ exports are affected largely by policy and market. Nonetheless, the effects of policy and market factors on RET firm-level export have never received attention from researchers. This study aims to fill the gap by taking a political economy approach to establish a structural equation model to analyze the path of political-economic factor-firms’ market orientation-based export. This study reveals that RET firms’ market-orientation-based export enhancement depends entirely on political forces. Particularly, two government intervention instruments, environmental policy and export promotion policy, were highlighted. However, the effects of renewable energy policies on the exports of RET firms through market orientation are negative and statistically significant. This study proves that the effects of inter-firm competition and market attractiveness on RET firms’ exports through their market orientation are negative and statistically significant and insignificant, respectively. Further, this study demonstrates that RET firms’ market orientation has a significant positive effect on their export performance. We conclude that in order to improve RET-related policy effectiveness and efficiency, it will be useful to consider firms’ heterogeneity in response to external factors. Additionally, a full mediation model in the academic investigation of the effects of various external factors, including public policies and market factors, on firm-level export, and the implementation of firm-level export-induced policy, taking into account firms’ managerial interpretations to external factors, should be considered.

Domestic demand and exports: Evidence from Turkish firms

This study examines the relationship between real domestic sales and real exports for Turkish manufacturing firms. Dynamic panel data estimations based on firm-level data for the period 2004–2014 suggest that the two variables are substitutes. Other factors held constant, we estimate that a 10 percent decline in real domestic sales is associated with around 2.7 percent increase in real exports, on average. However, this relationship varies among manufacturing sub-sectors which are defined according to 2-digit NACE classification. Results indicate that substitutability between domestic and foreign sales is stronger for export-oriented, low-leveraged and younger firms and firms that operate in sectors whose exports are less import-dependent. Besides, the degree of substitution between the two variables significantly rises when domestic demand conditions are weak. This shows that exporter firms in the Turkish manufacturing industry can shift from domestic to international markets as a response to domestic demand shocks.

Firm‐level trade effects of WTO accession: Evidence from Russia

AbstractThis paper examines the impact of Russia’s World Trade Organization (WTO) accession on international trade patterns at the firm level. A large literature of cross‐country studies examines the long‐run trade effects of the General Agreement on Tariffs and Trade (GATT)/WTO membership. Our paper contributes to this literature by bringing short‐run micro‐level evidence from the experience of a large trading country. Using customs data on the monthly import and export transactions of Russian firms over the period 2011–2015, we investigate the short‐run responses of firm‐level trade along the intensive and extensive margins following Russia’s WTO accession in 2012. Our results indicate an increase in the number of foreign countries that Russian firms export to or import from, and a significant increase in the number of exported products. The evidence on the effects of the WTO accession on the intensive margin of firm‐level trade is mixed. Additionally, we find suggestive evidence that the Russian retaliatory food embargo imposed in response to the Crimean economic sanctions might have been intended as a protectionist policy to help out a vulnerable domestic industry (i.e. agriculture) directly impacted by the country’s WTO accession.

Effect of Country Distance on E-commerce Export: Focusing on the Moderating Effect of Entrepreneurship

Purpose - This study examines the role of e-commerce resulting from technological innovation as a new approach toward internationalization. We study the relationship between e-commerce export and country distance, measured in CAGE distance, which has hindered traditional internationalization. As a control variable, entrepreneurship was introduced to check the moderating effect on the relationship between country distance and e-commerce export. Design/methodology - Based on empirical analysis, e-commerce exports from the Republic of Korea to 96 countries were used as dependent variables. First, hierarchical regression analysis was conducted to test the hypothesis about each country s distance, measured by CAGE distance, and each dimension of CAGE, on e-commerce exports. Next, the hypothesis was tested through the interaction term to examine the moderating effect of entrepreneurship. Findings - The analysis showed that the hypothesis, which postulated e-commerce exports as affected negatively by the country s distance, was supported but not that all CAGE dimensions affected it. Specifically, geographical distance and economic distance have negative effects, but cultural distance and administrative distance did not affect e-commerce exports. Thus, in contrast to the expectation that distance restrictions in e-commerce would not exist, this study confirmed that distance still matters to internationalization and that entrepreneurship can mitigate the adverse effects. Originality/value - Through these results, when export firms try to enter new markets and start internationalization through e-commerce, the entrepreneurship of the importing country should be considered.

WTO accession and firm exports in developing economies

The World Trade Organization (WTO) has a significant impact on international business activities due to its actions and decisions that set the rules of international trade. However, our understanding of how WTO affects firm behavior is limited. Taking advantage of the variations in entry dates to the World Trade Organization, we perform difference-in-differences estimation to examine whether a country’s accession to the WTO significantly increases firms’ export intensity. In addition, we apply insights from the threat-rigidity hypothesis to argue that firms’ reactions to supranational institutions vary depending on how managers perceive the institutional environment. We find that firms from countries that enter the WTO experience significantly higher growth in export intensity when their managers have positive perceptions about domestic institutions. In contrast, accession to the WTO does not significantly increase firms’ export intensity whose managers perceive domestic institutions as obstacles. Our findings suggest that supranational institutions, such as the WTO, play an important role in the strategic decisions that firms make. However, the full value of such institutions can only be realized if the managers are aware and positively disposed to engage with these institutions.

Export effect and influence mechanism of foreign ownership

This paper empirically tests the export impact of foreign ownership by using the dataset of Chinese listed firms from 2003 to 2016. The robust results show that foreign ownership facilitates a company’s exports significantly, but only long-term foreign investors can enhance export performance. We conclude that foreign ownership has a weaker promotive role on exports in state-owned enterprises (SOEs), compared with private enterprises. Finally, we examine whether the influence mechanism runs though R&D, but surprisingly there is no evidence to support this prediction, even for high-tech enterprises. This paper provides micro-evidence that foreign ownership can increase exports under the background of China’s progressive equity reform and supplies indirect evidence of the information intermediary role of foreign ownership in promoting firm exports.

The simultaneous effect of firm capabilities and competitive strategies on export performance: the role of competitive advantages and competitive intensity

PurposeThis study aims to determine the simultaneous effect of exporting firms' competitive strategies and capabilities on the achievement of competitive advantages and export performance under the boundary conditions of competitive intensity. In so doing, the study combines the alternative theoretical lenses of the resource-based view (RBV) and the structure–conduct–performance (SCP) paradigm.Design/methodology/approachPrimary data were obtained from 281 Turkish manufacturer–exporter firms operating in different sectors and located in several regions of the country. Structural equation modeling was utilized to test our conceptual framework, which combined the effects of RBV-based and SCP-based factors on competitive advantages and export performance under the moderating influence of competitive intensity.FindingsThis study reveals that unique firm capabilities, specifically informational, relational, and marketing capabilities, and competitive strategies, including differentiation and cost leadership, provide export firms with a competitive advantage and improve their export performance in foreign markets. Furthermore, competitive advantages partially mediate the effects of competitive strategies and unique firm capabilities on export performance. Finally, unexpectedly, and contrary to most of the existing literature, we find that competitive intensity negatively moderates the link between service advantages and export performance.Originality/valueThis research offers a comprehensive view of manufacturer–exporter firms' export performance by accounting for the overlooked simultaneous effect of firm capabilities and competitive strategies through the mediation of competitive advantages and under the boundary conditions of competitive intensity.

A Principal Component Analysis of the Problems Faced by Seafood Processing Export Firms in Kerala

The significance of the seafood processing export units has been undisputed owing to its contribution towards employment of skilled and semi-skilled workers, and its potential to generate foreign exchange earnings through export. The State of Kerala has been contributing a significant portion towards the Indian export of seafood products both in terms of value and quantity. Yet, there are evidences that the contribution has a staggered trend over the years, and it is declining. Studies in the past have highlighted the existence of various problems that are faced by the sea food processing export firms. These problems include raw material prices, quality of products, export regulations etc. The present study is an attempt to identify the specific nature of these problems through Principal Component Analysis. It is found that the problems faced can be segregated into four major components, namely, Labour Problems, Technical and Training Problems, Raw Material Problems, and Power and Other Inputs Problems.

Investigating the impact of the strength of supply chain integration on cost and responsiveness

ABSTRACT The purpose of this paper is to investigate strength of supply chain integration based on social exchange theory and its resultant impact on supply chain cost and responsiveness. The study surveyed Korean export firms and obtained 182 usable responses. Data were analysed using cluster analysis and analysis of variance. Findings confirm that the strength of supply chain integration provides a mechanism for measuring the width of integration for both suppliers and customers. Further, identifiable gaps in cost performance and responsiveness were found based on strength of supply chain integration. This paper contributes through the development and testing of a conceptual model based on social exchange theory and also offers managerial suggestions in the understanding of customer needs and the importance of sharing information with suppliers in achieving improved cost performance and responsiveness in the supply chain.

Freedom of the press and corporate misconduct

AbstractThis study examines how freedom of the press affects corporate misconduct, focusing mainly on earnings management. I find that firms engage more in earnings management when they have a high percentage of sales in countries with restricted media freedom. I find that the influence of foreign partners’ media freedom on earnings management depends on how domestic investors process information about firm export markets and how multinational firms shape their relationship with stakeholders. Additionally, the presence of analysts in foreign countries reduces firms’ incentives to exploit media restriction to manipulate earnings. Finally, I further show that insiders of these firms tend to be involved in opportunistic insider trading, which could indicate corporate misconduct. Overall, these results show that corporate misconduct can be in part explained by a spill‐over effect of the media freedom of export markets.

Ownership structure and firm export performance: evidence from Slovenian microdata

This paper combines two very distinct strands of literature, firm-level trade analysis and studies on the impact of ownership structure. I explore the correlation between firm ownership structure and its engagement in external trade using data for the population of Slovene enterprises between 2005 and 2012. The estimates indicate that concentrated firm ownership is more conducive to firms being exporters. Even after controlling for firm type, age, ownership type and ownership stability in addition to the full set of covariates accounting for exporting status, firms with a smaller number of owners and more concentrated ownership are found more likely to be exporters. Results prove to be robust to changes in definitions and econometric approach. These findings fully support the inclusion of ownership structure variables in firm-level trade analysis as one of the core determinants of exporting success.

Does Income Equality of Export IPO Firms Hurt Their Market Returns in Korea?: Using Fama-French 5 Factor Model

Purpose - This study investigates the effects of income inequality across provinces of export firms on their initial and long-term stock returns in the Korean initial public offering (IPO) market. Design/Methodology/Approach - Using 520 IPO firms listed on the Korea Exchange (KRX) from 2002 to 2016 and financial and accounting, regional population data and IPO information, we study the effects of income inequality, measured in relative Gini coefficients over provinces of Korea, of export firms on initial returns (IR) and their long-term cumulative abnormal returns (CARs). Findings - The Gini income inequality index is found to have a positively significant effect on the IR of IPO for the whole and the export firm sample, but without statistical significance for the non-export firm sample. Second, the level of exports has a negative and significant effect on the initial returns of IPO for the pooled sample. Third, the income inequality not only affects IR, but also affects the long-term CARs. Fourth, the export ratio does not show any statistically significant effect on the long-term CARs for all the samples in the CAPM model. Fifth, the income inequality index also has a significant positive effect on all the three measures of CARs in the Fama-French 3, 4 and 5 factor models. Research Implications - We propose to allocate IPO shares based on income level, hopefully more shares to be assigned to lower income investors.

Assessing Impact of Liberalization on Financial Performance Sustainability of Indian Pharmaceutical Industry using Structure Conduct Performance Model

The Indian Pharmaceutical Industry is ranked third largest by volume and fourteenth by value. It thus accounts for 10% of world’s production by volume and 1.5% by value according to Department of Pharmaceuticals, Government of India. Recognizing the immense potential for growth of Indian pharmaceutical industry and its direct impact on Indian economy the present paper tries to analyze the market structure of the Indian pharmaceutical firms and assess how the sustainable profitability of firms is affected using structure conduct performance model. The study founds out the sustainable profitability is statistically related to firm size, export and import, raw material expenses, power use and wage intensity but there seems to be insignificant effect of market share and mergers and acquisition on firm’s performance in terms of sustainable profitability.

Are exporting firms linked to cleaner production? A study of eco-innovation in Taiwan

The relationship between export firms and cleaner production is understudied. To advance the literature, this study examines 4949 manufacturing and services firms from the Third Taiwanese Technological Innovation Survey (TTIS3) database. Cleaner production is a broad concept and in this study, a proxy measure is used by relying on eco-innovation levels employed at the firm level, which includes materials (reduced material use per unit of output), energy (reduced energy use per unit of output), carbon emissions (reduction of the CO2 footprint), dangerous substances (replacement of materials with less polluting or less hazardous substitutes), other pollution control (reduced soil, water, noise or air pollution) and recycling. Based on theoretical arguments of institutional theory, export firms are positively associated (β = 0.23; p < 0.001) with cleaner production (as measured by eco-innovation). However, the relationship is unlikely to be linear and therefore key external and internal contingencies are considered. Of external contingencies, government subsidies (β = −0.03; n.s.) and consumer demand (β = 0.04; n.s.) do not a have a moderating effect. Of internal contingencies, a proactive corporate environmental strategy (β = 0.19; p < 0.001) and absorptive capacity (β = 0.69; p < 0.001) positively moderate the relationship. Analysis to further unpack the relationships among components in the main effects tests are provided and an outline of the contributions of the findings along with limitations and future research directions are provided.

Does it matter where you export and does productivity rise with exporting?

Utilizing a comprehensive dataset for Turkish manufacturing firms, we analyse differentials in the post-entry effects on productivity of exporting to markets with different income levels. We employ propensity score matching techniques with multiple treatments, together with a differences-in-differences (DiD) methodology. Controlling for firm level mark-ups, we explore whether the post-entry effects on productivity are driven by changes in physical productivity. The results confirm the learning-by-exporting hypothesis, and suggest physical productivity gains, in particular for exports to high income countries as opposed to middle low-income countries, even after controlling for the composition of exports. This suggests that where a firm export does matter for productivity growth.

Minimum Wages and Firm Exports: Evidence from Vietnamese Manufacturing Firms

This paper investigates the relationship between the minimum wage and firm’s export behavior by using firm-level data of Vietnamese manufacturing...

Working Capital Management and Its Impact on Firms’ Performance: An Empirical Analysis on Ethiopian Exporters

Companies may have their level of optimal working capital that maximizes their values through the effective management of current liabilities and assets. Previously, many studies were made on the impact of working capital management on the company’s performance in different sectors; however, its impact on the performance of firms that are engaged in export activities was not given any consideration and this particular study has attempted to investigate the fundamental impact of working capital management on the export firm’s performance in Ethiopia. To analyze this particular study, a total of 164 exporters operating in Ethiopia have been taken as a sample and both primary and secondary data collection methods were used. The data gathered from the sample of the study were analyzed using a multiple linear regression model and the result reveals that working capital management which was measured by account receivables period, cash conversion cycle, and accounts payable period has a statistically significant and positive correlation with the performance of exporting firms in Ethiopia which was measured by both return on assets and return on investment. However, working capital management which was measured by the inventory conversion period has a statistically significant and positive impact on return on investment, but it has an insignificant impact on the performance of sampled export firms in Ethiopia which was measured by return on assets. Based on the result of the study, firms may need to extend credit terms for customers, may prolong their cash conversion cycle, may need an extended payment period, and may or may not hold a high volume of inventory. All extending periods and cycles shall be made up to the extent of attaining an optimal level of working capital and better to implement a conservative policy of working capital management. Thus, it is advisable to consider the result of this study while making decisions regarding their working capital management to support their performance.