DRIVERS OF AWARENESS AND USE OF EXPORT PROMOTION PROGRAMS

DRIVERS OF AWARENESS AND USE OF EXPORT PROMOTION PROGRAMS Abstract The drivers of awareness and use of export promotion programs have received some attention in the past in the export literature. This paper will shed light on the impact of export promotion programs on the firm s export performance and the relationship of the intervening drivers on export promotion programs and on the firm s export performance. The proposed conceptual model is drawn on the existing literature showing that both the constructs the awareness of export promotion programs as well as the use of export promotion programs play central strategic role in shaping the firm s export performance. Keywords - Export promotion programs, firm s export performance Paper type - Literature review Track International Marketing

DRIVERS OF AWARENESS AND USE OF EXPORT PROMOTION PROGRAMS INTRODUCTION The awareness and the use of export promotion programs seem to differ in various industrialized countries, USA, UK, Germany and Japan, due to the fact that these countries offer different sets of export assistance programs. Since an export activity is strongly related to the economic development, the gap between the awareness and the use of export promotion programs fluctuates between industrialized and less developed countries. Consequently, the study of the gap between the awareness and the use of export promotion programs is important under the light of the new developments in the literature related to conceptual models. A SEM analysis has been introduced in recent years as a powerful tool to investigate various conceptual models in the area of the impact of export promotion programs (EPPs) on firm s export performance (Table A, Appendix). However, some other good conceptual models which were developed within the period 1991-1999 (Table B, Appendix) did not utilize any of the today s software, Lisrel, EQS or AMOS which are used interchangeably in the SEM analysis (Hair et al, 2010). Consequently, a synthesis of the previous developed constructs in the literature and use of the SEM analysis can lead to more down-to-earth constructive conceptual models. This research aims to identify existing literature regarding the impact of export promotion programs on the firm s export performance and to find gaps in the exporting literature, so that a new conceptual model is developed. The literature on firm s export performance was developed sufficiently in the past decade as a number dealt with it (Katsikeas et al (1996; 2000); and Leonidou et al (2002)). Concerning the field of export promotion programs, there are at least twenty studies that have been dealt with export promotion models, based on diverse hypotheses. Particularly, fifteen models were empirically tested during the period 1990 to 2012 (Axinn and Thach, 1990; Singer and Czinkota, 1994; Wilkinson and Brouthers, 2000; Francis and Colleen, 2000; Gencturk and Kotabe, 2001; Zou et al, 2003; Francis and Collins-Dodd, 2004; Morgan et al, 2004; Lages and Montgomery, 2005; Wilkinson and Brouthers, 2006; Shamsuddoha and Ali, 2006; Shamsuddoha et al, 2009; Koksal, 2009; Leonidou et al, 2011; and Coudounaris, 2012). The remaining five models have been developed without any empirical test (Czinkota, 1994; Davar and Wheeler, 1995; Marandu, 1995; Kumcu et al, 1995; and Naidu et al, 1997). This study also aims to propose a dynamic model involving the awareness and the use of export promotion programs together with the adoption of the resource-based view theory of the firm. The proposed model contents that both export-related resources and capabilities will boost the awareness and the use of export promotion programs. In turn, the awareness of export promotion programs strengthens the use of export promotion programs provided that the firm is in an advanced export development stage. Furthermore, it is hypothesized that the use of export promotion programs is positively related to the firm s export performance provided that the firm s characteristics are not primitive or minimal and the firm understands the usefulness of such export promotion programs. LITERATURE REVIEW A systematic research on export promotion programs and their impact on the firm s export performance started three decades ago (Czinkota and Ricks, 1981; Czinkota and Johnston, 1981; Czinkota, 1982;) although the first attempt of developing of an export promotion model was done by McConnell (1976) without using hypotheses or complicated constructs. Studies on export promotion programs have been examined either by the providers i.e. governments, or the receivers i.e. individual firms. The export promotions research done among firms can be classified into five segments (Leonidou et al 2011). Thus, the conceptual map of the existing five streams of the research on export promotion programs is depicted in Figure 1 of the Appendix. The first stream of research can be divided into six subgroups. The first subgroup deals with the awareness, usage, and usefulness of export promotion programs by non-exporters (Kumcu et al 1995). The second subgroup deals with the same issues as the first subgroup but from the exporters point of view (Kedia and Chhokar 1986) whereas the third subgroup deals with the issues as the first and the second subgroups but from the point of view of both non-exporters and exporters (Albaum 1983; Marandu 1995). As for the fourth subgroup of the research, it deals with studies focused on the use and the effectiveness of specific export promotion programs, such as participation in trade missions (Seringhaus 1987). The fifth subgroup is associated with government export assistance needed by firms (Czinkota and Ricks 1981; Howard and Herremans 1988; Diamantopoulos et al 1993; and Tesfom and Lutz 2008). Finally, the sixth subgroup is related to export promotion programs and the firm s characteristics i.e. firm size (Moini 2

1998; Ahmed et al 2002) as well as the firm s management i.e. previous experience (Gray 1997). The second stream of the research deals with the segmentation of firms receiving export assistance programs in relation to their internationalization stage (Crick and Czinkota 1995; Czinkota 1996; Ahmed et al 2002). The third stream of research focuses on export promotion programs and factors that stimulate and/or de-regularize the firm s efforts to engage or extend its export activity (Albaum 1983; Vanderlest 1996). The fourth stream of research considers export promotion programs as instrumental while associated with organizational and/or managerial competences (Seringhaus and Rosson 1990; Czinkota 1996). Finally, the fifth stream of the studies focuses on the development of a number of conceptual models dealing with export promotion programs and their impact on export performance. The current author s efforts focus on this stream of the research in order to understand better the existing relationship as well as to fill in the gaps by means of developing of a new dynamic model. This fifth stream of studies seeks to find the effect of export promotion programs on the firm s export performance, either directly or through the intervening effect of other factors. An indicative list of the recently developed conceptual models of drivers and outcomes of Export Promotion Programs and their effect on the firm s export performance is shown in Table A (Appendix). However, another list of contributors is presented in Table B (Appendix) including mostly, graphically presented conceptual models. The first list includes various advanced and complicated conceptual models, that examine the relationship between the export promotion programs and the firm s export performance (Gillespie and Riddle 2004; Lages and Montgomery 2005; Wilkinson and Brouthers 2006; Shamsuddoha and Ali 2006; Shamsuddoha et al 2009). According to the most recent study by Leonidou et al 2011, the first three studies (Gillespie and Riddle 2004; Lages and Montgomery 2005; Wilkinson and Brouthers 2006;) find the direct effect of export promotion programs on the firm s export performance, whereas the remaining two studies (Shamsuddoha and Ali 2006; Shamsuddoha et al 2009;) find the intervening effect of other factors. The direct effects include such factors as the company s size and the international outlook. The intervening factors such as managerial perceptions, knowledge and commitment help into the design of an export marketing strategy and the development of the firm s competitive advantage in overseas markets. In their model Leonidou et al (2011) have come up with four primary constructs in a loop, and with two secondary loops of secondary constructs. According to them, the four primary constructs i.e. export marketing strategy, export product competitive advantage, export market performance and export financial performance are positively related and comprise the backbone of their model. In addition, national export promotion programs have a positive influence on export-related resources and export-related capabilities which in turn influence the export marketing strategy. Also the export marketing strategy has a twofold effect on export cost competitive advantage and on export service competitive advantage which in turn influence the export market performance. The model was tested with various existing tools leading to a stable and a valid model. The pitfall of this model suggested by Leonidou et al (2011) is that it neglects both constructs of the awareness of export promotion programs (EPPs) and the use of EPPs that both have a crucial effect on the firm s export promotion (FEP) in countries with limited exports. There is evidence that in countries with limited exports, normal entrepreneurs just do not bother to contact corrupted ministries and their employees who usually develop export promotion programs in order to suitably satisfy their friends, existing exporters and close relatives. Export promotion programs are usually developed in governmental offices and in most of the cases have short deadlines or are well hidden in the governments drawers and are kept away from the sight of firms or openminded managers. Recently, Shamsuddoha et al (2009) have developed a conceptual model including two loops. The first loop was consisting of five primary constructs i.e. market, management perceptions, knowledge, commitment and performance. The second loop consisted of three constructs i.e. finance, commitment and performance. The model developed by Shamsuddoha and Ali (2006) consisted of four primary constructs which were positively related i.e. use of export promotion programs, export knowledge, export strategy and export performance. Furthermore, the construct use of export promotion programs was, on the one hand, positively related to management perception of the export market environment and on the other hand, to the export commitment, whereas both in turn influenced the export strategy and the export performance. Finally, the construct use of export promotion programs was positively related to the export performance. In an earlier attempt Gillespie and Riddle (2004) developed a model consisting of five primary constructs i.e. export promotion organization strategic choices, export promotion organization services, awareness of export 3

promotion organization, use of export promotion organization and firm s performance. Furthermore, this model was composed of three secondary loops. Firstly, the export promotion organization influences perceived usefulness of the export promotion organization services and secondly, it influences the trade environment which in turn impacts the firm performance. The second loop deals with the firm s characteristics and other export activities which influence the awareness of the export promotion organization (EPO) services, the use of EPO services and the perceived usefulness of EPO services, the firm performance and the perceived usefulness of EPO services. The third loop has to do with the influence of the EPO institutional environment on EPO services, awareness of EPO services and use of EPO services. This model was completely different from the previous two models already discussed above (Shamsuddoha and Ali 2006; and Leonidou et al (2011). Specifically, this model concentrates on the EPO and the firm s characteristics however, it does not refer to managers or entrepreneurs who will eventually become aware and use the export promotion programs. In their attempt Zou et al (2003) developed a conceptual model of export marketing capabilities and export performance. The model was composed of two levels of influences. The first level of influences included pricing capability, distribution capability and communication capability which had an impact on low cost advantage and distribution capability. In addition, communication capability and product development capability had an impact on branding advantage. Finally, both low cost advantage and branding advantage had an influence on export financial performance. Another study by Francis and Collins-Dodd (2000) has reached to a conceptual model. However, their results (2004) showed that sporadic and active exporters used to gain the most from export promotion short-term programs, while there was little impact of the export promotion programs in the short run for more experienced international firms. Based on the information provided by Table A (Appendix), during the period 1990 to 2012, fifteen conceptual models have dealt with the impact of the export promotion programs on export performance, and have been tested empirically. The most striking characteristic of these models is that most constructs relationships have been found positively and statistically significant related and have explained well the impact of export promotion programs on the export performance. One of the weaknesses of these recent models is that they presuppose that managers are aware of the export promotion programs and there is no time lag between the awareness of export promotion programs and the actual use of the export promotion programs. In reality, and in most of the cases, export managers are not aware of existing export promotion programs and consequently, are not informed to use them. The present researcher takes into consideration this reality and develops a conceptual model involving the constructs of awareness of EPPs and usage of EPPs. It is worth noting that the construct of awareness was firstly developed and explained by Kumcu et al (1995) and the construct of use of EPPs was included in the conceptual models proposed by Wilkinson and Brouthers (2006) and Shamsuddoha et al (2009). As it is shown in Table B (Appendix), during the previous decade 1990-1999, researchers have suggested five conceptual models regarding the issue of the impact of export promotion programs on export performance, however, all efforts have been neither tested empirically nor suitably developed to include research hypotheses. THE PROPOSED MODEL AND ITS CONSTRUCTS Bearing in mind the above mentioned and particularly, the first three subgroups of the first stream of the research and the fifth stream of the research in the conceptual map (Figure 1, Appendix), the proposed framework at Figure 2 in Appendix shows the conceptual model of the drivers of awareness and use of export promotion programs. First, the various types of interrelationship are conceptualized and later on, a number of hypotheses are developed for empirical testing in a future research. The proposed conceptual model (Figure 2, Appendix) consists of six constructs A1) the firm s factors i.e. resources and capabilities, A2) the awareness of export promotion programs, A3) the firm s export development stage, A4) the use of export promotion programs, A5) the firm s characteristics and the usefulness of export promotion programs and A6) the firm s export performance. This theoretical model considers the gap between the awareness of export promotion programs and the use of export promotion programs being a driving force shaping the firm s export performance. The first construct includes resources and capabilities which are used by the so-called Resource-Based-View of the firms model. It capitalizes on the importance of the firm s resources and capabilities. The control by the firm of the resources and capabilities provides the basis for designing and implementation strategies which should help to achieve high levels of awareness of export promotion programs and improve the levels of use of export promotion programs 4

(Barney 1991; Barney 2001;). It is worth noting that both constructs of resources and capabilities appeared in the model developed by Leonidou et al (2011). In addition, the construct of resources was part of some other models recently developed by Wilkinson and Brouthers (2006), Morgan et al (2004) and Naidu et al (1997). The construct of capabilities was also exploited and included in the conceptual models of Zou et al (2003) and Czinkota (1994). A recent model developed by Morgan et al (2004) hypothesized a positive relationship between capabilities and resources, and export venture competitive strategy, positional advantage in export market and export venture performance. Specifically, these authors found out that the export venture performance was strongly related to its positional advantage in the marketplace, whereas the positional advantage in turn, was directly connected with the availability of key resources and capabilities. Also the key resources and capabilities were linked with each other and were directly connected with the export venture s competitive strategy choices. However, their predicted relationship between export venture competitive strategy and positional advantage was not supported by their data and two more predicted kinds of relationship have failed to be supported by data, namely, the relationship which has linked the competitive intensity in the export market with the export venture s positional advantage. The second construct of awareness of export promotion programs was included in the model proposed by Kumcu et al (1995). The issue of managers awareness of incentive programs was also included in the Response Hierarchy Model developed by Diamantopoulos et al (1993). According to the Response Hierarchy Model, the awareness of export assistance programs influences attention to assistance opportunities which in turn, have an impact on expectations and attitudes towards assistance and finally, there is an impact on willingness to use assistance. Marandu (1995) mentioned that awareness was not such a satisfactory factor explaining export performance. Reid (1984) found out in his study that 43.8% of the surveyed Canadian firms were aware of the program for export market development and only 22.5% of the firms surveyed managed to use the program for export market development. In their study Kedia and Chhokar (1986) showed that exporters had some knowledge for some of the export promotion programs. Subsequently, most of the non-exporters showed in this study that they wanted to learn more about the export promotion programs. In the same study it was found out that to a high degree some export promotion programs were non-effective due to low levels of awareness and consequently, these authors stressed out the need to increase awareness (Kedia and Chhokar, 1986). Albaum (1983) examined the degree of awareness of export promotion programs among small manufacturers in USA provided by the Department of Trade and EX-IM Bank, and found out that the awareness of export promotion programs was 38% and 13.2% respectively, which is considered very low. There are various attempts in the literature of classifying firms in export development stages (Bilkey and Tesar, 1977; Czinkota, 1994). Bilkey and Tesar developed the third construct that is a model with six export development stages, whereas Czinkota (1982) developed a similar model with nine export stages. Crick (1995) tested in UK a modified six-stage version of Bilkey and Tesar model and suggested that UK Government was correct in using a threestage model of the internationalization process to target export assistance. According to Leonidou and Katsikeas (1996), there is a plethora of export development models in the literature. Consequently, the insertion of this construct is considered important. The fourth construct of the use of export promotion programs appeared for the first time in the literature in the 1980 s (Albaum, 1983; Reid 1984; Kedia and Chhokar, 1986). Albaum (1983) found out that export promotion programs provided by the Department of Trade and Ex-Im Bank were 22.1% and 1.2% respectively. This percentage is considered very low. In his survey in Canada Reid (1984) found out that the use of export promotion programs was very low too. Kedia and Chhokar (1986) found out that the use of the export promotion programs by both the exporters and non-exporters was approximately at the same level. Kedia and Chhokar (1986) stressed out that the high levels of awareness of export promotion programs are needed in order to have a good level of their usage. In 1990 s, this construct was also used by Marandu (1995). In his survey it was found out that from the exporting firms surveyed 83% were aware of the export promotion programs while 63% of the firms participating in the survey actually used the export promotion programs. The fifth construct of the proposed model is the firm s characteristics and usefulness of the export promotion programs. This usefulness of the export promotion programs was used as a construct in Marandu s model (1995). Marandu (1995) mentioned that the usefulness or the importance of export promotion programs tends to be a factor which is associated with the exports performance. In 1993, Diamantopoulos et al stressed out the importance of government export promotion programs and argued that the size of a firm makes the difference when it decides whether to use government export promotion programs. Diamantopoulos et al (1993) utilized the findings of Buckley 5

who reported that smaller firms make less use of government export assistance than larger firms. They also supported this finding by Reid s explanation that smaller firms may be using other facilities such as newspapers, trade association publications and exhibitions as sources of information. The sixth construct that is the firm s export performance is treated in the proposed model as the dependent variable and indeed, there is a good number of studies referring to the impact of export promotion programs on the firm s export performance. Table A and Table B in Appendix include most relevant models consisting of the important construct of firm s export performance in association with the impact of export promotion programs. Bearing in mind the discussion about the proposed model, eleven research hypotheses can be tested in a future survey as they are shown in Figure 3 of the Appendix. CONCLUSIONS In the literature review the researcher indicated all existing conceptual models which have dealt with the impact of export promotion programs on the firm s export performance (Table A and Table B, Appendix). Most of the models included in Table A have used advanced statistical methods i.e. a SEM analysis (Leonidou et al 2011 used EQS; Shamsuddoha et al 2009 used AMOS; Shamsuddoha and Ali 2006 used AMOS; Lages and Montgomery 2006 used Lisrel 8.3; Morgan et al 2004 used CFA; Zou et al 2003 used CFA). It is worth noting that the majority of the models which have been developed in the last decade have been tested empirically in various environments (Cyprus for Coudounaris 2012; Britain for Leonidou et al 2011; Bangladesh for Shamsuddoha et al 2009; Bangladesh for Shamsuddoha and Ali 2006; USA for Wilkinson and Brouthers 2006; Portugal for Lages and Montgomery 2005; Canada for both studies of Francis and Collins-Dodd 2000 and 2004; Britain for Morgan et al 2004; China for Zou et al 2003; USA for Gencturk and Kotabe 2001;). Some of the models have been empirically tested with less advanced statistical methods (Wilkinson and Brouthers 2006 used the Regression analysis and the Correlation analysis; Francis and Collins-Dodd 2004 used the Factor analysis and the Correlation analysis; Gencturk and Kotabe 2001 used the analysis of Variance; Francis and Collins-Dodd 2000 used the Factor analysis, the Correlation analysis and the Regression analysis; Wilkinson and Brouthers 2000 used the Correlation analysis and the Regression analysis). While looking at the constructs of the models of the current literature review, one can conclude that many researchers have utilized the following constructs as central and primary ones. Specifically, the construct of export strategy was used in the models developed by Leonidou et al (2011), Shamsuddoha and Ali (2006), Morgan et al (2004), and Naidu et al (1997). Equivalently important constructs for the development of conceptual models were both the firm s resources and the firm s capabilities. On the one hand, the construct of resources was included in the models suggested by Leonidou et al (2011), Wilkinson and Brouthers (2006), Morgan et al (2004) and Naidu et al (1997), while on the other hand, the construct of capabilities was used in the models developed by Leonidou et al (2011), Morgan et al (2004), Zou et al (2003) and Czinkota (1994). Another important construct which was used in the developed models was the construct of export knowledge (Shamsuddoha and Ali (2006) and Francis and Collins-Dodd (2004)). As the above analysis shows, many models combine two or more loops of functions with different constructs which had eventually a joint impact on the firm s export performance. Most of the empirical surveys which concentrated on measuring the impact of export promotion programs on firm s export performance and the tests of the various models, have taken place in export intensive countries i.e. Britain, USA, China and Canada. The author believes that in less export intensive countries i.e. Sweden, Austria, Poland and Czech Republic (Eurostat, 2012;) where exporting firms face different problems compared to exporting firms in more traditional exporting nations, the issues of awareness, usage and usefulness of export promotion programs may play more important role in the shaping of a firm s export performance. Consequently, the proposed model can be more suitable to the realities and needs of small exporting firms which mainly exist in less export intensive countries rather than exporting firms in very intensive exporting countries. Finally, the conceptual model developed in this paper which is based on the existing literature can be tested in large intensive exporting countries such as Germany, Netherlands, France and Britain (Eurostat, 2012;) which provide a variety of export promotion programs to exporting firms, and at the same time to be compared in less export intensive countries such as Sweden, Austria, Poland and Czech Republic. The comparison between exporting firms in an export intensive country and exporting firms in a less export intensive country will shed light on whether the suggested model is more suitable for its application in less export intensive countries. 6

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export market performance. H7: The firm s capitalization on its export service competitive advantage will have a positive effect on its export market performance. H8: The achievement of a high export market performance by the firm will lead to high export financial performance. H9a: Compared to large firms, small firms exhibit a stronger effect of national export promotion program adoption on enhancing export-related resources. H9b: Compared to large firms, small firms exhibit a stronger effect of national export promotion program adoption on enhancing export-related capabilities. H10a: Compared to experienced exporters, inexperienced exporters will exhibit a stronger effect of national export promotion programs adoption on enhancing export-related resources. H10b: Compared to experienced exporters, inexperienced exporters will exhibit a stronger effect of national export promotion programs adoption on enhancing export-related capabilities. H11a: Compared to export market spreaders, export market concentrators exhibit a stronger effect of national export promotion program adoption on enhancing export-related resources. H11b: Compared to export market spreaders, export market concentrators exhibit a stronger effect of national export promotion program adoption on enhancing export-related capabilities Koksal Mehmet Haluk (2009) H1: There are significant differences among companies according to their size and export promotion awareness, utilization and usefulness level. H2: There are significant differences among companies in terms of their export experience and export promotion awareness, utilization, and usefulness level. H3: There are significant differences among companies based on the number of export destinations they export and export promotion awareness, utilization and usefulness level. H4: There are significant differences among export companies in terms of the distance of their markets and export promotion awareness, and usefulness level. H5: There are significant differences among companies according to their involvement with exporting and export promotion awareness, utilization, and usefulness level. Shamsuddoha, Ali and Ndubisi (2009) H1: The use of market development-related export assistance programs positively influence a) management perception of foreign market environment, b) international marketing knowledge, c) commitment to international marketing and d) firm performance in international marketing. H2: The use of finance and guarantee-related export assistance programs positively influence a firm s a) commitment to international marketing and b) performance in international marketing. H3: The firm s international marketing knowledge is positively related to a) management perception of foreign market environment, b) commitment and c) strategy. H4: Management commitment is positively related to a firm s a) international marketing strategy and b) performance. H5: Management perception of overseas market environment is positively related to a firm s international marketing strategy. H6: A firm s international marketing strategy positively influences its performance. Shamsuddoha and Ali (2006) H1: The firm s export knowledge is positively related to a) management perception of export market environment, b) export commitment, c) export strategy and d) export performance. H2: Export commitment is positively related to a firm s a) export strategy and b) export performance. H3: Management perception of export market environment is positively related to a firm s a) export strategy and b) export performance. 10

H4: A firm s export strategy is positively related to export performance. H5: The use of government EPPs is positively related to a) management perception of the export market environment, b) export knowledge, c) export commitment and d) export performance. Wilkinson Timothy and Brouthers Lance Eliot (2006) H1: The level of internal firm resources is positively associated with firm satisfaction with export performance. H2: The use of state-sponsored trade shows is positively associated with firm satisfaction with export performance. H3: The use of state-sponsored programs which identify agents and distributors is positively associated with firm satisfaction with export performance. Lages Luis Filipe and Montgomery David B. (2005) H1: Management international experience is positively associated with export assistance. H2: The degree of export market competition is positively associated with export assistance. H3: Management international experience is positively associated with pricing strategy adaptation. H4: Export assistance is positively associated with pricing strategy adaptation. H5: Export market competition is positively associated with pricing strategy adaptation. H6: Management experience is positively associated with annual export performance improvement. H7: Pricing strategy adaptation is positively associated with annual export performance improvement. H8: Export assistance is positively associated with annual export performance improvement. H9: Export market competition is negatively associated with annual export performance improvement. Morgan Neil, Kaleka Anna, and Katsikeas Constantine (2004) H1: Available capabilities to the export venture are positively associated with export venture competitive strategy. H2: Available resources to the export venture are positively associated with export venture competitive strategy. H3 Available resources to the export venture are positively associated with available capabilities to the export venture. H4: Export venture competitive strategy is positively associated with positional advantage in export market; H5: Competitive intensity of export market is positively associated with positional advantage in export market. H6: Positional advantage in export market is positively associated with export venture performance. H7: Export venture performance is positively associated with available capabilities to the export venture. H8: Export venture performance is positively associated with available resources to the export venture. H9: Available capabilities to the export venture are positively associated with positional advantage in export market. H10: Competitive intensity of export market is a moderator between export venture competitive strategy and positional advantage in export market. Francis June and Collins-Dodd Colleen (2004) H1: For pre-exporters, a number of export promotion programs used is positively associated with achievement of export market knowledge objectives, product marketing objectives, marketing and export marketing competence and export planning. H2: For sporadic exporters, a number of export promotion programs used is positively associated with achievement of export market knowledge objectives, product objectives, product marketing objectives, marketing and export marketing competence, export planning as well as longer-term and immediate export strategies. H3: For active exporters, a number of export promotion programs used is positively associated with achievement of export product objectives, short and long-term market expansion strategies, export 11

marketing competence and economic performance, and market diversification performance. H4: For the majority exporters, achievement of objectives, strategies, and competencies is independent of a number of export programs used and positively related to economic and market diversification performance. Zou Shaoming, Fang Eric, and Zhao Shuming (2003) H1: An export venture s pricing capability positively affects its low-cost advantage in the export market. H2: An export venture s product development capability has a positive effect on its branding advantage in the export market. H3: An export venture s distribution capability positively affects its branding advantage in the export market. H4: An export venture s distribution capability positively affects its low-cost advantage in the export market. H5: An export venture s communication capability positively affects its a) low-cost advantage and b) branding advantage in the export market. H6: An export venture s a) low-cost advantage and b) branding advantage positively affects its financial performance in the export market. Gencturk Esra F. and Kotabe Masaaki (2001) H1: The export involvement of a business will be positively associated with its performance in terms of a) efficiency, b) effectiveness, and c) competitive position. H2: The usage of export promotion programs by a business will be positively associated with the firm s a) efficiency and b) competitive position but will have c) no impact on its effectiveness. Francis J and Colleen Collins-Dodd (2000) H1: Strategic orientation is a multidimensional construct with at least two separate dimensions: proactive and conservative. H2: a) A proactive export orientation will be positively associated with export performance for high-tech exporters, and b) a conservative export orientation will not be associated with export performance or will be negatively associated with export performance for high-tech exporters. H3: Proactive and conservative export orientations are independent of years of exporting and a firm s size. H4: A proactive export orientation, compared to a conservative export orientation, will be more positively associated with export commitment attitudes and export marketing budget allocations. Wilkinson Timothy J and Brouthers Lance E. (2000) H1A: Trade shows are positively associated with state exports. H2A: Trade missions are positively associated with state exports. H3B: Trade shows are positively associated with high-tech growth exports. H4B: Trade missions are positively associated with high-tech growth exports. Singer Thomas O. and Czinkota Michael R. (1994) H1: The type of export assistance services used is related to the type of export outcomes (activity and performance) achieved by firms. H2: Firm export stage is related to the type of export outcomes achieved by firms. H3: The interaction of service type and export stage is related to the type of export outcomes achieved by firms. H4: Management commitment is positively related to the number of export outcomes achieved. H5: Export stage is positively related to the number of export outcomes achieved. H6: The interaction of management commitment and export stage is related to the number of export outcomes achieved. Axinn Catherine N. and Thach Sharon V. (1990) H1: Commitment to export and country and industry specific factors have a positive effect on marketing activities. H2: Marketing activities have a positive effect on export performance (success). 12

TABLE B: POSSIBLE HYPOTHESES WHICH HAVE NOT BEEN EMPIRICALLY TESTED IN VARIOUS OLDER CONCEPTUAL MODELS, 1994-1997 POSSIBLE HYPOTHESES OF OLDER CONCEPTUAL MODELS INVOLVING EXPORT PERFORMANCE TOGETHER WITH OTHER CONSTRUCTS Naidu, Cavusgil, Murthy, and Sarkar (1997) H1: International marketing environment, management beliefs and priorities regarding export development, stock of competencies for export development and stock of resources for export development have a positive effect on firm s export development strategy. H2: Firm s export development strategy has a positive effect on export performance. Kumcu Erdogan, Harcar Talha and Kumcu M. Ercan (1995) H1: Export environment has a positive effect on managers awareness of incentive programs. H2: Managers awareness of incentive programs has a positive effect on managers perception of the adequacy of incentive programs. H3: Managers perception of the adequacy of incentive programs has a positive effect on export behavior. Marandu Edward E. (1995) H1: Macro level factors i.e. characteristics of the international business environment and of the industry have a positive effect on micro-level factors. H2: Micro-level factors i.e. characteristics of the firm that is its strategy, structure and management team have a positive effect on export performance. Davar Subhasch and Wheeler Colin (1995) H1: Marketing knowledge arising out of the use of Government Export Promotion programs (MKGEP) bears a significant positive impact on product differentiation and product quality, which in turn, influence Export orientation (EO), Export growth (EG) and Return on Investment (ROI). H2: MKGEP enables a firm to charge a higher gross margin rate which has a positive effect on ROI. H3: MKGEP helps improve the promotion effectiveness which has a positive impact on EO/EG/ROI. H4: MKGEP improves the distribution effectiveness which influences EO/EG/ROI positively. Czinkota Michael R. (1994) H1: Export assistance has a positive effect on international market environment and on the firm s organizational characteristics & capabilities and on firm s managerial characteristics. H2: International market environment, the firm s organizational characteristics & capabilities and the firm s managerial characteristics have a positive effect on export involvement. H3: Export involvement has a positive effect on export performance. 13

FIGURE 1: CONCEPTUAL MAP OF STREAMS OF RESEARCH IN EXPORT PROMOTION DRIVERS OF AWARENESS AND USE OF EXPORT PROMOTION PROGRAMS 1 Awareness, usage, usefulness of EPP by nonexporters, exporters and both groups Use + effectiveness of EPP Government export assistance EPP + firm s characteristics + firm s management 2 Segmentation of firms receiving export assistance programs in relation to their internationalization stage 3 EPP + factors that stimulate or deregularize firm s efforts to engage or extend export activity 4 EPP are considered instrumental while associated with organizational + managerial competences Streams of Research in Export Promotion 5 Development of conceptual models dealing with EPP and their impact on export performance FIGURE 2: A CONCEPTUAL MODEL OF DRIVERS OF AWARENESS AND USE OF EXPORT PROMOTION PROGRAMS 1ST CONSTRUCT 2ND CONSTRUCT 3RD CONSTRUCT 4TH CONSTRUCT 5TH CONSTRUCT 6TH CONSTRUCT (A3) EXPORT DEVELOPMENT STAGE H6 H3b (A5) FIRM S CHARACTERISTICS AND USEFULNESS OF EXPORT PROMOTION PROGRAMS H5b S (A1) FIRM S FACTORS RBV: RESOURCES H7 (A1) FIRM S FACTORS RBV: CAPABILITIES H1a H1b (A2) AWARENESS OF EXPORT PROMOTION PROGRAMS H3a USE OF H2 EXPORT H4 H4 PROMOTION PROGRAMS H8 (A4) H5a (A6) FIRM S EXPORT PERFORMANCE 14

FIGURE 3: ELEVEN HYPOTHESES OF THE PROPOSED MODEL H1a: There is a positive relationship between the firm s resources and the awareness of export promotion programs. H1b: There is a positive relationship between the firm s capabilities and the awareness of export promotion programs. H2: There is a positive relationship between the awareness of export promotion programs and the use of export promotion programs. H3a: The export development stage is a moderator between the awareness of export promotion programs and the use of export promotion programs. H3b: There is a positive relationship between the export development stage and the use of export promotion programs. H4: There is a positive relationship between the use of export promotion programs and the firm s export performance. H5a: The firm s characteristics including the usefulness of export promotion programs is a moderator between the use of export promotion programs and the firm s export performance. H5b: There is a positive relationship between the firm s characteristics including the usefulness of export promotion programs and the firm s export performance.. H6: There is a positive relationship between the firm s resources and the use of export promotion programs. H7: There is a positive relationship between the firm s resources and the firm s capabilities. H8: There is a positive relationship between the firm s capabilities and the use of export promotion programs. 15