European

Journal Determinants of export

of Marketing
30,6
performance in a European
context
6
Constantine S. Katsikeas, Nigel F. Piercy and Chris Ioannidis
Received January 1995 Cardiff Business School, University of Wales, Cardiff, UK
Revised June 1995

Introduction
As a result of the increasing tendency towards a global economy and the
severities of trade deficit pressures by many countries, firm behaviour and
performance in export markets has received considerable research attention
over the last two decades. A major part of this research has focused on the
investigation of those factors underlying a firm’s initial export involvement
(Aaby and Slater, 1989; Bilkey, 1978; Gripsrud, 1990). Certainly, this stream of
research has contributed to export marketing theory by concentrating on a
critical early stage in the process of internationalization, where a wholly
domestic firm faces the real challenges of the international environment
(Douglas and Craig, 1992). However, less empirical attention has been paid to
the export behaviour of firms that are already engaged in, and thus possess
experiential knowledge of, exporting activities (Gripsrud, 1990). It should be
noted that one possible way of increasing exports at a national level is through
stimulating exporting companies to export more. It follows that the export
behaviour and performance of current exporters is an area of legitimate
interest, and such studies can be of importance to both public and private sector
administrators concerned with future export development and success.
In addition, a systematic review of the pertinent empirical literature suggests
that the vast majority of the research efforts have surveyed firms connected
with exporting from highly industrialized countries, particularly the US and
Canada. An implication of this is that it may be both dangerous and potentially
misleading to infer generalizations from such findings to export marketing
contexts in other countries, especially those at a different stage of development
and/or with a different domestic market size.
In view of these limiting empirical considerations in the exporting literature,
an attempt is made to synthesize and empirically test a model of export
performance focusing on exporters from a small EU country. Specifically, the
study constitutes part of a major project on the exporting activities of
indigenous Greek manufacturers, trading with overseas distributors within the

The authors thank Robert Morgan and Neil Morgan for their comments on an earlier version of
European Journal of Marketing,
Vol. 30 No. 6, 1996, pp. 6-35. this article. They are also grateful to the anonymous EJM reviewers for their helpful insight and
© MCB University Press, 0309-0566 constructive comments and suggestions.
spectrum of the EU. The paper is formatted into several sections. First, the Determinants of
relevant literature is reviewed. Second, key theoretical and measurement export
problems and issues underlying export performance evaluation are performance
systematically examined. Third, attention is paid to major exporting
considerations contingent to Greek firms and governmental policies, thus
providing a rationale for the study. Fourth, a conceptual model of export
performance is developed through the statement of several hypotheses. Fifth, 7
the research design and methodological procedures are described. Sixth, the
study findings are presented and discussed. Finally, managerial and public
policy implications are highlighted, and a set of directions for future research
are identified.

Literature review
A plethora of studies have been conducted under the aegis of export marketing,
and many internal and external factors have been identified that influence firm
behaviour and performance in export markets. The evaluation of these works is
beyond the scope of this paper, as several attempts have been made to assess
and synthesize the export marketing literature over a period of time (Aaby and
Slater, 1989; Bilkey, 1978; Gemunden, 1991). However, considerable dissension
has been witnessed in the field with respect to the nature and significance of
many variables as determinants of export behaviour and performance (Aaby
and Slater, 1989; Cavusgil and Zou, 1994; Dominguez and Sequeira, 1993;
Walters and Samiee, 1990). Subsequently, attention is drawn to some important
discrepancies most relevant in the context of this study:
• Firm size. Cavusgil and Naor (1987) and Christensen et al. (1987)
concluded that the larger the company the more likely it is to export.
Reid (1983) found that size has a significant effect on the decision to enter
new export markets, while Czinkota and Johnston (1983) suggested that
company size does not affect export activities. By contrast, Gripsrud
(1990) revealed a negative relationship between firm size and the attitude
towards future exports. Concerning the relationship between size and
export intensity, Culpan (1989) established a positive relationship,
Diamantopoulos and Inglis (1988) found no relationship, while Cooper
and Kleinschmidt (1985) concluded a negative relationship.
• Export experience. It has been found that a firm’s exporting experience
has a positive effect on export performance (Madsen, 1989), the degree of
internationalization (Dominguez and Sequeira, 1993), and attitudes
towards future exports (Gripsrud, 1990). Nevertheless, other empirical
evidence is inconsistent with these findings (Cavusgil, 1984;
Diamantopoulos and Inglis, 1988; Moon and Lee, 1990).
• Production technology. Most findings indicate that perceived
technological strengths are positively related to propensity to export
(Aaby and Slater, 1989). In contrast, Reid (1986) concluded that there is
European only a weak relationship between technology and export performance,
Journal and Christensen et al. (1987) revealed no relationship.
of Marketing • Price. It has been shown that competitive export price levels are
30,6 positively related to export performance (Kirpalani and MacIntosh,
1980; Madsen, 1989) and export stage development (Moon and Lee,
1990). However, differential price advantage was not found to be
8 significant in discriminating between systematic and non-systematic
exporters (Bourandas and Halikias, 1991). Dominguez and Sequeira
(1993) also reported that the importance of price as a competitive tool for
LDC exports diminishes as firms progress along the export development
path.
• Domestic market orientation. Findings suggest that domestic market
orientation is a major obstacle to a firm’s export involvement and
commitment (Karafakioglu, 1986; Kaynak and Kothari, 1984). Moreover,
a negative relationship has been reported between the attractiveness of
the domestic market and export growth (Madsen, 1989). Contrary to this
stream of findings, Cooper and Kleinschmidt (1985) revealed that export
intensity was positively correlated with both domestic market potential
and domestic market growth.
• Contextual environmental factors. Trade barriers, cultural differences
and physical distance to export markets have been found to play an
inhibitory role in export development and success (Cavusgil, 1984;
Kaynak and Erol, 1989). Nevertheless, some empirical efforts run counter
to the general pattern and revealed that these factors did not have a
significant effect on export attitudes, behaviour and performance
(Gripsrud, 1990; Madsen, 1989).
Prima facie, this diversity of empirical findings gives some credibility to the
view that considering the characteristics of the specific exporting context leads
to a better understanding of those factors that influence export performance.
This implies that it may be difficult to suggest universally valid prescriptions
for export success, and that situation-specific elements are recognized and
emphasized in the process of designing and implementing effective models of
export marketing behaviour (Walters and Samiee, 1990).
Nonetheless, several limitations of past research can be identified that are
likely to account for many of the inconsistencies in the literature. First, much of
the knowledge about successful export activity is fragmented, and the tradition
of building on previous findings is not well-established in the export marketing
field (Aaby and Slater, 1989; Cavusgil and Zou, 1994). Many studies have been
conducted in isolation by focusing mainly on single factors affecting export
behaviour. Attention has been given to such areas as: export motivation; export
problems; firm size and export performance; and management’s personal
characteristics. There have been few efforts to develop and test models that
incorporate a relatively wide range of relevant factors. Notable exceptions are
the studies by Cavusgil and Nevin (1981), Cavusgil and Zou (1994) and Cooper Determinants of
and Kleinschmidt (1985). export
Second, the vast majority of exporting studies have primarily examined performance
independently the univariate effect of each variable on export behaviour,
without analysing the effects of these independent variables together (Moon
and Lee, 1990). However, it is clear, particularly in the various literature review
efforts, that multiple factors play an important role in firms’ export behaviour 9
at the same time. It is thus essential that account be taken of the interaction
among those independent variables considered in the determination of export
performance.
Third, insufficient attention has often been given to the specific
characteristics of the exporting situation. Most studies on export behaviour and
performance have failed to control for potentially important confounding
influences relating particularly to the export market entry mode, export
destination, export stage development, or industrial sector. That in turn may
cast doubts on the meaningfulness of certain findings.
Fourth, some of the discrepancies in the literature might also be attributable
to differences regarding the way in which export performance has been
assessed (Cavusgil and Zou, 1994; Walters and Samiee, 1990). Aaby and Slater’s
(1989) review of the export marketing literature suggests that researchers have
followed two fundamental approaches. One stream of research pursues the
distinction between exporting and non-exporting firms (e.g. Cavusgil and Naor,
1987; Cavusgil and Nevin, 1981; Yaprak, 1985). This approach is based on the
implicit assumption that exporting per se attaches an element of success to the
firm. Despite the importance of this set of studies, one innate deficiency in this
approach is that no account is taken of potentially significant differences
between different exporter groups in terms of export performance (Aaby and
Slater, 1989).
The other approach focuses on exporting companies and measures export
performance according to some criterion pertaining to the export position of the
firm. The most commonly used criteria are: export-to-total sales ratio (Beamish
and Munro, 1986; Dominguez and Sequeira, 1993); export sales volume
(Czinkota and Johnston, 1983; Madsen, 1989); export sales growth (Cooper and
Kleinschmidt, 1985; Madsen, 1989); and export profitability (Bilkey, 1978;
Dominguez and Sequeira, 1993). Importantly, there appears to be considerable
consensus, especially among recent studies, on the use of multi-measure
approaches (e.g. Beamish and Munro, 1987; Craig and Beamish, 1989;
Dominguez and Sequeira, 1993; Samiee and Walters, 1990). This tendency is
grounded in that export performance evaluation on the basis of a single
indicator is likely to capture only a particular aspect of the construct
(Dominguez and Sequeira, 1993). Nevertheless, there has been serious concern
about the use of the operational measures predominantly employed in the
literature as appropriate export performance indicators (Aaby and Slater, 1989).
This leads us to more closely scrutinize the issue of export performance
assessment.
European Problems and issues in assessing export performance
Journal An examination is made of key theoretical issues and empirical findings in the
general fields of both marketing and strategy, where the theme of business
of Marketing performance has received heightened research attention at conceptual and
30,6 empirical levels (Deshpande et al., 1993; Dess and Robinson, 1984; Jaworski and
Kohli, 1993; Slater and Narver, 1994; Venkatraman and Ramanujam, 1986). A
10 systematic review of the literature in these areas reveals two major issues that
are critical in the evaluation of firm performance in export markets. These refer
to the mode of performance assessment (Dess and Robinson, 1984;
Venkatraman and Ramanujam, 1987) and the choice of performance dimensions
that should be measured (Deshpande et al., 1993; Szymanski et al., 1993).
The mode of performance assessment
The two principal modes of performance assessment identified in the general
literature are objective (e.g. based mainly on records relating to absolute figures
of company profitability, sales level and such like) and subjective (e.g.
managers’ perceptions) measures. In the context of export marketing, the vast
majority of studies have utilized objective performance indicators.
Nevertheless, there are two different sources of problems with the use of
objective measures in assessing export performance. One is concerned with
research methodology. In this regard, two potentially important limiting issues
warrant consideration. First, formal company financial statements and reports
often make no clear distinction between domestic and export business
operations, due in part to the fact that many firms view exporting as an
extension of their domestic activities (Yang et al., 1992). The question which
may then be raised is whether accurate objective indicators of export
performance can always be obtained.
Second, a serious comparability caveat may arise as a result of inherent
measurement weaknesses underlying most objective measures. For instance,
profitability is contingent on factors such as the depreciation method followed
and the way in which overheads are allocated. However, these aspects reflect
internal accounting practices that often vary from one company to another.
This problem becomes even more complex when the export dimension is
incorporated. Similarly, objective export performance indicators, such as sales
volume, sales growth and market share[1], might have little meaning in those
cases where the firms surveyed belong to different industry or product groups
(Covin, 1991). Major differences among industries or product subsectors, in
terms of competition, technology intensiveness, or market structure, could lead
to the comparison of measures that may not be entirely “like for like” across the
sample firms.
The other major problem source underlying the use of objective export
performance measures appears to be more fundamental, and is connected with
theoretical considerations. It has been theorized that managers are in control of
the process of strategy formulation and implementation, and thus can choose
where and how to compete (e.g. Child, 1972; Hambrick and Mason, 1984). There
is clearly a consistent thread in the literatures of marketing and strategy that
links decision-maker cognitive biases and values with perception of strategic Determinants of
situations and strategic choice outcomes (e.g. Hambrick and Mason,1984; export
March and Simon, 1958). It follows that what is most relevant to organizational performance
behaviour is how managers perceive the internal and external environments of
the firm, rather than the objective reality of these environments. In relation
specifically to performance evaluation, management action is driven by
perceptions of company performance rather than by objective calibration of its 11
performance characteristics (for a discussion see Bourgeois (1980)). This in turn
gives credibility to the development and adoption of perceptual measures of
export performance.

The choice of performance dimensions

Three considerations are of particular importance here. First, there is
widespread agreement that firm performance in export markets is a
multifaceted concept (e.g. Aaby and Slater, 1989; Buckley et al., 1988; Cavusgil
and Zou, 1994). As noted earlier, a variety of measures have been suggested in
the extant literature. Aaby and Slater’s (1989) review effort concludes that
firms’ export performance must be assessed on the basis of the achievement of
their export objectives. The characteristics of the exporting framework should
certainly play a key role in the adoption of appropriate measures of export
performance (Buckley et al., 1990; Madsen, 1989).
Second, different exporting firms are likely to set different export
performance targets, depending on the nature of their export marketing
strategy. However, when emphasis is placed, for instance, on export profitability
export sales volume might suffer, whereas export market share sustenance or
improvement would probably entail profitability sacrifices (for a discussion see
Buckley et al., 1988). This, in turn, highlights the importance for developing
composite export performance measures, that can take account of the dynamics
relating to the underlying relationships of export performance facets.
Third, due to structural differences among various export markets, certain
potentially important explanatory variables, such as perceptions of export
stimuli, exporting problems and competitive advantages, may significantly
differ across export destinations. In those circumstances where it is essential to
control for such confounding influences, export performance must be assessed
at the export destination level (Buckley et al., 1988)[2].

Greece as a case for analysis

This study concentrates on the issue of export performance and its
determinants among indigenous firms in Greece. The country’s gradual shift
from heavy reliance on import substitution strategies in the 1970s to
contemporary export orientation makes it an interesting test case. Many other
countries are in a similar stage of development policy, and/or experience
structural characteristics and exporting contingencies resembling those
notable in Greek firms. This is turn enhances the substantive character of this
study.
European Specifically, export marketing activities are of vital importance to the
Journal survival and growth of Greek companies. This is ascribed to the relatively small
local market size which often restrains “domestic extra-regional expansion”
of Marketing (Welch and Wiedersheim-Paul, 1978), alongside the intensifying competitive
30,6 climate in Greece as a result of the opening up of frontiers within the EU. In
addition, it appears that most Greek firms are unable effectively to reach and
12 sustain an advanced mode of international involvement, such as manufacturing
overseas (Bourandas and Halikias, 1991), due primarily to their lack of adequate
managerial and financial resources (Bourandas, 1988; Katsikeas, 1989). From a
national viewpoint, exporting activities are an effective means of alleviating the
pressures arising from Greece’s growing trade deficit, which currently runs at
the level of ECU973.5 million (OECD, 1993).
In comparison with the case of other more industrialized countries, such as
the US and Canada, Greek national export policies are still in an embryonic
phase and are characterized by a lack of focus on specific exporter needs.
Certain financial incentives and tax credits, along with import duty reliefs for
capital equipment and supplies directed towards export-oriented
manufacturing, are the main public export policy tools in Greece (Katsikeas,
1989). In addition to resource constraints, the role of the Greek government in
export promotion might have been hindered by the lack of parsimonious,
empirically-tested models of export behaviour and performance. Such models
would be of vital importance not only in guiding the formulation and
implementation of optimal national export policies, but also for the adoption of
effective export marketing strategies.
Research model and hypotheses
Two key issues have been taken into consideration in developing our model of
export behaviour. First, as evidence suggests that different exporter categories
vary in their characteristics and behaviour (Cavusgil, 1984; Samiee and Walters,
1991), we examine firms that are engaged in regular export activities[3]. This
exporter group represents a distinct, advanced stage in the process of export
development (Naidu and Rao, 1993). Second, we focus on indigenous
manufacturing firms exporting through overseas distributors. The use of
overseas distributors is of vital importance in the establishment and
development of international operations, whether serving as a permanent
foreign market entry and expansion mode (Bello et al., 1991; Reid, 1983) or a
transitional strategy in the process of internationalization (Bello et al., 1991;
Johanson and Vahlne, 1990). It is a very common approach adopted by export
manufacturers (Beamish et al., 1985; Rosson, 1984), especially those based in
less industrialized countries (Dominguez and Sequeira, 1993), due mainly to
such factors as their limited financial and/or human resources and insufficient
export market knowledge.
A diagram of the model proposed in this study is shown in Figure 1. Based
on our review of the export marketing literature, certain structural company
characteristics, export commitment and export-related perception variables are
integrated and viewed as potentially significant factors influencing export
 Objective firm characteristics
Determinants of
export
Size
Exporting experience
performance
• Length
• Scope

13
Export related perception
variables
Export
Export stimuli performance
Exporting problems
Competitive advantages

Export commitment
Separate export department
Foreign market entry and
customer selection criteria Figure 1.
Regular export market visits Proposed model of
Export planning and control export performance

performance. Below, we consider the relational linkages in the proposed model

and discuss specifically those variables that, according to existing theory, are
likely to affect export performance.

Firm size
There are three fundamental factors leading to the formation of expectations
that company size is related positively to firms’ behaviour and performance in
export markets. These pertain to organizational resources, economies of scale,
and the perception of risk in international activity. Specifically, larger exporting
manufacturers are widely considered to possess more financial and human
resources; enjoy higher levels of scale economies; and perceive lower levels of
risks about foreign markets and operations (for a discussion, see Bonaccorsi,
1992). These size-related advantages are likely not only to facilitate
understanding of foreign market characteristics, but to enhance a firm’s ability
to respond effectively to the requirements of overseas customers, thus
potentially leading to higher export performance levels. Despite the existence of
counter-arguments (Bonaccorsi, 1992), it is possible to hypothesize accordingly
that:
H1: Firm size is positively related to export performance.

Exporting experience
It has been theorized that experiential knowledge about overseas markets and
operations[4] is a driving force in the internationalization of the firm. This is
considered to be so, whether international growth and development is
European conceptualized as an incremental, sequential stage process (Cavusgil, 1984) or
Journal as a steep, non-gradual approach (Sullivan and Bauerschmidt, 1990). Such
of Marketing experiential knowledge is vital especially for those Greek firms exporting to the
EU, where competitive practices generally are more sophisticated than those
30,6 employed domestically. It should be remembered that these firms have grown
and developed in a domestic market framework[5], characterized by a relatively
14 limited scope of marketing practice and orientation (Avlonitis and Gounaris,
1992).
The theoretical explanation for the relationship between exporting
experience and export performance lies in the issue of uncertainty and the way
firms cope with it (Erramilli, 1991). Less experienced exporters are likely to
perceive considerable uncertainty, which in turn might adversely affect their
perceptions of potential risks and returns about overseas markets and
operations (Agarwal and Ramaswami, 1992; Davidson, 1982). Nonetheless, with
increasing exporting experience, firms are likely to perceive less uncertainty in
their exporting activities; have a better understanding of foreign market
mechanisms; develop a network of personal contacts and customer
relationships abroad; and, consequently, design and implement effective export
marketing programmes (Madsen, 1989). It may then be expected that more
experienced exporters would do better in comparison with others. Hence:
H2: Company experience with exporting activities is positively related to
export performance.

Export stimuli
In focusing on firms’ attempts to identify and exploit foreign market
opportunities, export marketing researchers have distinguished between
proactive and reactive export stimuli (Johnston and Czinkota, 1982; Piercy,
1981). Proactive stimuli are those associated with the firm’s aggressive
behaviour and deliberate search for export opportunities (pull factors). Reactive
stimuli are those connected with the firm’s reaction to changing conditions and
reflect a passive attitude in seeking exporting opportunities, though possibly
leading to an accidental or fortuitous export involvement (push factors). It is
clear that these two motivation types reflect different patterns of export
attitudes and behaviour, respectively. Therefore, they are likely to influence
export performance in a different fashion. As export decision making may be
driven by both proactive and reactive elements simultaneously (Johnston and
Czinkota, 1982), it is then expected that:
H3: The higher the levels of proactive (reactive) export stimuli, the more
likely a positive (inverse) relationship with export performance.

Exporting problems
A major impetus for export development and success is the need to develop the
capability required to manage exporting problems (Yang et al., 1992). The
findings of Katsikeas and Piercy (1990) indicated that Greek manufacturers
employed an opportunistic and non-methodical approach to exporting Determinants of
activities. However, the adoption of such an export approach is likely to affect export
adversely the development of experiential knowledge of overseas markets and performance
operations. The implication is that these firms may be unable adequately to
perceive the magnitude of, and in turn appreciate the difficulty and importance
of overcoming exporting problems (Seringhaus, 1987). The existence of such
problems would limit their ability to effectively seek, identify and exploit export 15
market opportunities. This, in turn, may lead to unsatisfactory export
performance levels. Hence:
H4: Perceptions of exporting problems experienced by firms are inversely
related to export performance.

Competitive advantages
A firm’s propensity and capacity to establish and maintain regular exporting
activity depends on its competitive position in those overseas markets targeted
in its export strategy. Firms may be able to choose among a number of different
methods to compete in export markets. Each pattern of competitive export
strategy is correspondingly connected with specific competitive advantages
(Namiki, 1988). The market character of export destination might be an
important factor influencing the adoption of a suitable export competitive
posture, leading to export survival and success (Aaby and Slater, 1989).
Nonetheless, the theoretical justification for a positive relationship between
competitive advantages and performance in export markets lies in the intuitive
sense that the firm’s ability to serve these markets better than competitors could
enhance its export performance. Hence:
H5: Perceptions of competitive advantages in export markets are positively
related to export performance.

Export commitment
Managerial commitment to exporting activities is likely to have a particularly
strong impact on the export behaviour and success of Greek manufacturers.
This is primarily attributed to the existence of considerable differences in
market characteristics between Greece and the more industrialized EU
countries, traditionally the main export market targets for these firms
(Katsikeas and Piercy, 1990). To ensure export survival and maintain regular
exporting operations to such overseas markets, it is important that Greek firms
understand different buying attitudes and employ more sophisticated
marketing practices in comparison with those in the domestic market. In
developing such a capability, resource commitment to exporting, reflected in
such activities as export department organization, export planning and control,
export marketing research and regular export market visits, is likely to be of
major importance (Beamish et al., 1993; Bonaccorsi, 1993; Cavusgil and Naor,
1987). Accordingly, it is possible to expect that:
European H6: Resource commitment to exporting is positively related to export
Journal performance.
of Marketing
Methodology
30,6 Data collection
Data were collected in a survey of indigenous Greek food export manufacturers,
16 trading with overseas distributors in the EU. Food products occupy a major
position in the composition of Greece’s manufactured exports. The decision to
study exporting firms in a single industry, alongside a specific export market
entry mode and a single exporting country, was made to maintain sample
heterogeneity as low as possible. Such heterogeneity could significantly
diminish the meaningfulness of study findings (Bilkey, 1978; Cavusgil, 1984).
The following steps were integral to the design of the survey questionnaire.
First, a review of the relevant literature was made for items effectively
operationalizing the constructs in Figure 1. Second, the list of questionnaire
items was further developed with the co-operation of four business
professionals, three high-ranking officials from the Hellenic Export Promotion
Organization and two academicians familiar with research on export
marketing. Finally, the research instrument was extensively pretested and
refined through personal interviews with export executives in Greece, thus
ensuring that the questions were relevant and phrased in a meaningful manner.
Those Greek food manufacturers exporting to the EU were identified from
current lists provided by the Confederation of Greek Exporters and the Hellenic
Export Promotion Organization. These lists have been compiled over several
years and updated on a regular basis. The combination of the two lists was the
point of departure in defining the sampling frame for the study. All 341 firms
listed were initially contacted by telephone. Ninety-four out of 126 food
manufacturers reported that they were involved in regular exporting activity to
the EU employing mainly overseas distributors, thus meeting the sampling
frame requirements. All 94 companies exported to Germany and considered
this country to be a key export market, while only 73 and 62 of these firms were
found to export to the UK and France respectively. Hence, to control for
potentially significant confounds, pertaining to export destination within the
spectrum of the EU, the study was confined to the analysis of the exporting
operations of Greek food manufacturing firms to Germany.
Personally-administered interviews were engaged to attain higher
respondent participation and enhanced quality data. All 94 exporters were
approached and asked to provide the information required. A total of 87 firms
took part in the research, a response rate of 92.6 per cent. Of the responding
firms, 51.7 per cent had a maximum of 100 employees, 26.5 per cent employed
between 101 and 300 individuals, and the remainder (21.8 per cent) employed
more than 300 personnel. Almost 55 per cent of the companies had an annual
sales volume over ECU5 million. While 97.3 per cent of the firms were
established over ten years ago, 77 per cent had been engaged in exporting for
more than ten years.
 In the data collection process, particular attention was given to the Determinants of
identification and selection of the most appropriate individual available in each export
responding firm to participate in the study. To assure reliability of the performance
information provided, respondents (key informants) had to meet two main
criteria: familiarity with the firm’s exporting activities to the EU, especially
Germany; and responsibility for determining relevant export marketing policy
decision-making (Butaney and Wortzel, 1988). Key informants were found to be 17
in executive positions, namely, export managers (mainly in larger firms) and
managing directors or owners (particularly in smaller firms). The approach
suggested by Butaney and Wortzel (1988) and Huber and Power (1985) for
using a single, key informant was also followed during the interview process,
with the view to minimizing the potential for systematic and random sources of
error.

Operational measures
Dependent variable: export performance
Measurement of export performance was based on perceived values, rather
than objective indicators, for several reasons. From a theoretical perspective,
and in line with the “strategic choice” school of thought (e.g. Child, 1972;
Hambrick and Mason, 1984), export decision makers are guided by their
subjective evaluations of firm performance in export markets, rather than by
objective, absolute performance ratings (Madsen, 1989). Further, our pre-study
interviews revealed that managers would frequently be unwilling or unable to
respond effectively to questions regarding absolute export performance values.
This adds, in the context of the present study, to our earlier discussion of the
theoretical and other methodological problems inherent in the use of objective
indicators. In addition, there is empirical evidence supporting both the validity
and reliability of subjective performance measures (e.g. Covin and Slevin, 1988;
Dess and Robinson, 1984; Venkatraman and Ramanujam, 1987). Finally, a
similar approach has been used by other major studies, primarily in the broad
marketing management field (e.g. Deshpande et al., 1993; Jaworski and Kohli,
1993; Slater and Narver, 1993, 1994) and, to a limited extent, in the export
marketing area (e.g. Cavusgil and Zou, 1994; Madsen, 1989).
In this study, export performance is assessed in relation to the extent to
which firms achieve their export objectives, which is grounded in Aaby and
Slater (1989). On the basis of the process described in the previous section, three
export objectives were identified as relevant and important in the case of Greek
firms: export sales, market share and profitability. Respondents were asked to
indicate their perception of how well their company had performed in achieving
each of these objectives, with regard to its exporting activities to Germany, over
the last three years. A five-point scale, ranging from “very badly”(1) to “very
well”(5), was used. Following Venkatraman and Ramanujam (1986), these data
were factor analysed to assess the dimensionality of export performance.
Principal components analysis results showed that all three items loaded
heavily on a single factor, which accounted for 85.6 per cent of the total variance
European (Table I). An eigenvalue of 2.57 and the scree test supported the selection of this
Journal single-factor solution. Factor scores were then calculated for use in subsequent
of Marketing analyses (Kim and Mueller, 1978).
30,6
Export performance item Factor loadings Communality
18
Market share 0.92 0.85
Sales volume 0.96 0.92
Profitability 0.89 0.80
Table I.
Principal components
analysis of perceived Eigenvalues 2.57
export performance Percentage of
items variance explained 85.6

Independent variables
Firm size. There is no universally accepted measure for capturing company
size, and several size indicators have been suggested in the general literature. In
export performance research, the most commonly used criteria for measuring
firm size are the number of employees and/or total sales volume. Both of these
measures are employed in this study.

Exporting experience. Two fundamental dimensions of a firm’s exporting

experience are considered in this study. These refer to the length, measuring the
intensity of the firm’s exporting experience, and scope, measuring the diversity
of this experience (Erramilli, 1991). Length was operationalized as the number
of years the manufacturer had been engaged in exporting activities. The scope
of a firm’s exporting experience was operationalized as the number of countries
that the firm was involved in through regular exporting operations[6].

Export stimuli. The final survey instrument included 18 items representing

perceived export stimuli (ES). Respondents were asked to rate the importance
of these items on a five-point scale, extending from “not at all important”(1) to
“extremely important”(5). The responses to the 18 ES items were factor
analysed to assess construct dimensionality. One item, opportunity to reduce
inventories, lacked variation, while another, reduction of tariffs in target
countries, caused interpretation problems to the factor solution. Both were
dropped from further analysis. The final principal components analysis, with
varimax rotation, identified six factors that were selected on the basis of
eigenvalues greater than one and using the scree test (Table II). The six factors
accounted for 70 per cent of the total variance. The solution featured strong
individual loadings on each factor, thus enabling conceptual interpretation. The
six ES dimensions, in order of variance explained, are interpreted as follows:
domestic market pressures (ES1), fortuitous conditions leading to export
 Factor loadings
Fortuitous
conditions Export
Domestic leading to International National product- Exogenous
market export Managerial export market market
pressures involvement outlook policy match conditions
Export stimulus a,b (ES1) (ES2) (ES3) (ES4) (ES5) (ES6) Communality

Diminishing domestic sales 0.81 0.22 0.04 –0.01 –0.12 0.09 0.73
Saturated domestic market 0.88 0.20 0.05 0.01 0.16 0.03 0.84
Intensifying domestic competition 0.83 0.13 –0.13 0.18 0.17 0.13 0.80
Unsolicited orders from abroad 0.14 0.67 –0.19 0.02 –0.22 0.05 0.56
Production capacity availability 0.32 0.70 –0.02 0.22 –0.01 0.26 0.72
Economies resulting from additional
orders 0.36 0.69 –0.10 0.14 –0.02 0.25 0.71
Managerial beliefs about the importance
of exporting –0.01 –0.04 0.92 0.05 0.05 –0.04 0.86
Managerial export experience –0.03 –0.12 0.90 0.02 0.10 0.15 0.86
Attractive export incentives –0.01 0.13 0.09 0.83 0.01 0.16 0.75
National export promotion policies 0.20 0.15 0.02 0.88 0.16 0.04 0.87
Attractive profit and growth opportunities
overseas 0.15 –0.24 0.35 0.02 0.61 0.15 0.60
New information about sales opportunities
overseas –0.14 –0.01 0.27 –0.07 0.63 0.35 0.70
Possession of unique products appropriate
for serving export markets 0.24 –0.07 –0.19 0.17 0.66 0.13 0.59
Favourable currency movements 0.04 0.07 0.03 0.13 0.02 0.73 0.55
Opportunity to increase the number of country
markets and reduce the market-related risk 0.28 0.18 0.17 –0.30 0.20 0.55 0.58
Eased product regulations in target country 0.11 0.17 –0.01 0.27 0.21 0.61 0.53
Eigenvalues 4.40 2.77 1.80 1.32 1.26 1.06
Percentage of variance explained 24.4 15.4 10.0 7.3 7.0 5.9 70.0
Notes
a Using a five-point scale, ranging from “not at all important”(1) to “extremely important”(5)
b “Opportunity to reduce inventories” and “reduction of tariffs in target countries” are excluded from this analysis

export stimulus items

export
Determinants of

Principal components
19
performance

analysis of perceived
Table II.
European involvement (ES2), international managerial outlook (ES3), national export
Journal policy (ES4), export product-market match (ES5), and exogenous market
of Marketing conditions (ES6). Based on these results, factor scores were calculated and used
in further analyses.
30,6
Exporting problems. Twenty-four export problem (EP) items were selected for
20 the study. As it has been advocated that one issue may be a frequent problem
but not too important, while another may be of importance but rarely a problem
(Czinkota and Ricks, 1983), each item was measured along two attributes on a
Likert-type scale. One attribute asked respondents to indicate how frequently
each EP item was experienced during their exporting operations. The scale
polarized from “never” having a problem(1) to “always” being a problem(5). The
second dimension asked respondents to weight individual problems by their
importance, by indicating the extent to which each EP item negatively affected
their firm’s export business operations. Responses were measured on a scale
format, ranging from “no effect”(1) to “a very negative effect”(9) on exporting
activities.
To assess construct dimensionality the EP items were factor analysed. Using
an eigenvalue of one or greater as the criterion, along with the scree test,
principal components analysis, with varimax rotation, resulted in an eight-
factor solution which explained 71 per cent of the total variance (Table III). The
solution was not plagued with split loadings and all items loaded heavily on
individual factors, enabling straightforward interpretation. The eight factors
are referred to as information/communication with the export market (EP1),
product adaptation (EP2), export pricing constraints (EP3), marketing
organization adaptation (EP4), exogenous logistical constraints (EP5), national
export policy (EP6), perceived procedural complexity (EP7), and domestic
currency devaluation (EP8). Factor scores were then calculated for use in
further analyses.

Competitive advantages. Twenty items, representing perceived competitive

advantages (CA) in the export market, were included in the survey instrument.
Respondents were asked, for each of these items, to assess their firm’s position
relative to competition in the export market. A five-point scale, extending from
“major disadvantage”(1) to “major advantage”(5), was employed. The responses
to the 20 CA items were factor-analysed to explore the existence of possible
underlying dimensions. Three items, overseas distributor/customer service,
packaging and labelling, and access to external financial sources, were deleted
due to their lack of variation. The final principal components analysis, with
varimax rotation, revealed four factors that accounted for 68.2 per cent of the
total variance (Table IV). These were interpreted as production capability
(CA1), marketing capability (CA2), product superiority (CA3), and competitive
pricing (CA4). Factor scores were also calculated for use in all subsequent
analyses.
 Determinants of
Factor loadings
Export problema (EP1) (EP2) (EP3) (EP4) (EP5) (EP6) (EP7) (EP8) Communality export
performance
Insufficient
information about
overseas markets 0.72 0.11 0.06 0.18 –0.14 0.05 0.29 0.19 0.71
Inadequate 21
promotion in
export markets 0.65 0.04 0.12 0.05 0.26 –0.17 0.30 –0.07 0.64
Lack of export
marketing
research 0.70 0.02 0.24 0.09 –0.13 –0.01 0.11 0.13 0.60
Difficulty in
identifying
capable overseas
distributors 0.71 –0.11 0.12 0.06 0.22 0.18 –0.12 –0.07 0.64
Lack of information
on overseas
distributors 0.72 0.30 –0.01 0.04 0.04 0.30 –0.05 –0.13 0.73
Ineffective
communication
with overseas
customers 0.61 0.33 0.02 0.37 0.13 0.11 0.01 –0.06 0.64
Poor quality in
export
packaging 0.09 0.86 0.13 0.01 –0.07 –0.11 0.22 0.04 0.83
Difficulty in
meeting
importer’s
product quality
standards 0.19 0.79 –0.01 0.07 0.10 0.09 –0.08 0.07 0.70
Poor product
design and
style for export
markets 0.02 0.86 –0.01 0.20 0.10 0.01 0.15 –0.06 0.81
High cost of
capital to
finance exports 0.15 0.17 0.80 –0.08 0.01 0.21 –0.02 0.02 0.74
Inability to
self-finance
exports 0.01 0.28 0.69 0.20 0.08 0.16 –0.10 0.04 0.64
Lack of
competitive
prices 0.03 –0.18 0.61 0.09 –0.13 0.06 0.26 0.24 0.57
Strong
international
competition 0.23 –0.12 0.76 0.02 0.01 –0.03 0.05 0.03 0.65
Poor organization
of firm’s export Table III.
department 0.06 0.18 0.18 0.85 0.06 –0.03 0.03 0.03 0.81 Principal components
analysis of perceived
(Continued) export problem items
European
Factor loadings
Journal Export problema (EP1) (EP2) (EP3) (EP4) (EP5) (EP6) (EP7) (EP8) Communality
of Marketing
Lack of
30,6 personnel
qualified in
22 exporting 0.16 0.03 0.05 0.82 0.07 0.01 0.05 –0.19 0.75
Lack of “experts”
in export
consulting 0.27 0.08 –0.11 0.64 –0.07 0.34 0.06 0.20 0.67
High transportation
costs 0.05 0.01 0.15 –0.07 0.85 –0.03 0.19 –0.17 0.81
Difficulties in
transporting the
product(s)
exported 0.06 0.35 –0.12 0.18 0.68 0.14 0.29 0.21 0.78
Payment delays
from overseas
distributors 0.12 –0.04 –0.18 0.14 0.58 0.24 –0.14 0.25 0.60
Lack of
government
assistance in
overcoming
export barriers 0.02 0.06 0.30 0.07 0.06 0.81 0.08 –0.01 0.78
Ineffective national
export promotion
programmes 0.22 –0.06 0.06 0.05 0.07 0.79 0.22 0.03 0.74
Complexity of
export
documentation
requirements 0.26 0.16 –0.01 –0.03 0.26 0.05 0.75 0.09 0.74
Red tape in Greek
public institutions 0.03 0.10 0.09 0.12 0.05 0.27 0.74 –0.12 0.67
Insufficient
devaluation of the
domestic currency –0.01 0.05 0.24 –0.07 0.07 –0.01 –0.02 0.87 0.83
Eigenvalues 5.48 2.48 2.01 1.86 1.63 1.27 1.23 1.08
Percentages of
variance
explained 22.8 10.3 8.4 7.7 6.8 5.3 5.1 4.5 71.0
Note:
a Using a five point frequency scale, ranging from “never” having a problem (1) to “always”
being a problem (5), weighted by a nine-point importance scale.
EP1 = Information communication with export market
EP2 = Product adaptation
EP3 = Export pricing constraints
EP4 = Marketing organization adaptation
EP5 = Exogenous logistical constraints
EP6 = National export policy
EP7 = Perceived procedural complexity
Table III. EP8 = Domestic currency devaluation
Export commitment. Five nominally scaled questions (i.e. “yes”, “no”) were Determinants of
employed for assessing managerial responses to resource commitment to export
exporting. These related to the existence of a separate export department performance
(COM1); foreign market entry and customer selection criteria (COM2); regular
export market visits (COM3); the use of export marketing research (COM4); and
export planning and control activities (COM5). The reluctance of top
management to allocate adequate resources to such export tasks is seen as a 23
significant deterrent (Cavusgil and Naor, 1987).
Analysis of the correlation matrix revealed that few independent variables
were correlated at relatively high levels (greater than 0.40). This in turn
indicates substantial evidence of discriminant validity.

Analysis and results

Model estimation
The theoretical export performance model in Figure 1 was specified as a linear
equation and estimated, in three steps, using an ordinary least squares
regression procedure. Initially, we included all independent variables, namely
size[7], exporting experience (two dimensions), export stimuli (six factors),
exporting problems (eight factors), competitive advantages (four factors), and
export commitment (five aspects)[8]. At this stage, the null hypothesis tested
was that of their collective significance. The obtained value of the relevant test
statistic, F 26,61 = 2.47, indicated that the null hypothesis of the collective
significance of explanatory variables was rejected in favour of the alternative
(p < 0.01).
To achieve efficient coefficient estimates the model was re-estimated by
excluding all those independent variables whose t-statistic took an absolute
value lower than unity, as they did not contribute significantly to the
explanatory power of the model (Green, 1993). As shown in Table V, the
respecified (second-order) model included seven explanatory variables. To
attain a further parsimonious specification and improve the efficiency of the
estimates from the second-order model, only those variables found to be
significant, at the conventional level of 5 per cent, were selected for the final
regression model. Five significant variables[9] were included in the final model
(F5,82 = 12.90, p < 0.001)[10], together accounting for 41 per cent of the total
variance (Table V).
The results suggest that the export stimulus dimension of national export
policy (ES4) is positively related to export performance (H3)[11]. As expected,
the problem factor referred to as information/communication with the export
market (EP1) has a very substantial negative impact on export performance
(H4). Further, the positive sign of marketing capability (CA2) indicates that this
competitive advantage dimension is related directly to export performance (H5).
Two export commitment variables, notably export marketing research
(COM4) and export planning and control activities (COM5), are statistically
significant at a = 0.05 level. The positive sign of the export marketing research
(COM4) parameter estimate suggests a positive linkage with export
 24
30,6

Table IV.
Journal
European

advantage items
of Marketing

export competitive
analysis of perceived
Principal components
Factor loadings
Production Marketing Product Competitive
capability capability superiority pricing
Competitive advantage a,b (CA1) (CA2) (CA3) (CA4) Communality

Production method 0.84 0.23 0.08 0.09 0.77

Quality control process 0.77 0.31 0.16 0.04 0.71
New product development capability 0.77 0.14 0.14 0.02 0.64
Range of products offered 0.75 0.32 0.05 -0.02 0.67
Personnel experience and training 0.54 0.35 0.03 0.34 0.53
Operating efficiency 0.68 0.37 0.01 0.11 0.70
Importer’s distribution network 0.25 0.69 0.35 0.03 0.66
Export market/marketing knowledge 0.33 0.66 0.11 0.28 0.71
Company reputation 0.32 0.66 0.30 0.17 0.66
Promotional efforts 0.25 0.71 0.31 0.15 0.68
Assessment of export market developments 0.39 0.74 0.07 0.07 0.80
Personal contacts with overseas distributors 0.34 0.68 0.09 -0.06 0.67
Proximity to export market 0.08 0.74 0.03 -0.11 0.57
Product quality -0.02 0.19 0.83 -0.11 0.75
Product uniqueness 0.22 0.18 0.74 0.14 0.66
Price competitiveness 0.36 -0.27 0.20 0.62 0.67
Cost of raw materials -0.08 0.19 -0.08 0.84 0.76

Eigenvalues 7.58 1.65 1.23 1.13 68.2

Percentage of variance explained 44.6 9.7 7.3 68.2

Notes
a Using a five-point scale, ranging from “major disadvantage”(1) to “major advantage”(5)
b “Overseas distributor/customer service”, “packaging and labelling” and “access to external financial sources” are excluded from this analysis
Independent Second-order model Final modela
Determinants of
variables Coefficient t-value Coefficient t-value export
performance
National export policy (ES4) 0.19 2.20* 0.18 2.13*
Export market attractiveness (ES5) 0.11 1.27b
Information/communication with export market (EP1) -0.50 -5.70** -0.49 -5.59**
25
Marketing organization adaptation (EP4) 0.12 1.46b
Marketing capability (CA2) 0.26 2.95** 0.27 3.07**
Export marketing research (COM4) 0.45 2.04* 0.45 2.06*
Export planning and control (COM5) -0.46 -2.10* -0.49 -2.29*

Adjusted R2 0.42 0.41

F-statistic 9.83*** 12.09***

Notes:
a Misspecification tests

White heteroskedasticity test: X220=25.29b

Jarque-Bera normality test: X22=1.23b
Chow test (mid-point) F5,81=5.52b
b Not significant at a = 0.05 level
* Significant at a = 0.05 level
Table V.
** Significant at a = 0.01 level
Regression results and
*** Significant at a =0.001 level misspecification tests

performance (H6). Contrary to that expected, export planning and control

(COM5) is associated with export performance in a negative fashion.
As opposed to what was hypothesized (H1 and H2, respectively), both firm
size and exporting experience (two dimensions) appeared not to be significant
determinants of export performance. The results reported in Table V show that
these structural variables failed to reach significance.

Model evaluation
The final model was evaluated on the basis of the conventional criteria for the
detection of the absence of misspecification. The relevant misspecification tests
– homoskedasticity, normality and parameter stability – suggest that the
reported test statistics pertaining to parameter and model significance are
robust, since the regression model meets the preconditions for their validity
(Table V).
Specifically, the estimated equation does not suffer from any form of
heteroskedasticity[12], as the relevant test statistic computed (χ220 = 25.29,
p > 0.05) has assumed a value below the critical level of a = 0.05. Hence, the null
hypothesis of homoskedastic residuals is supported (White, 1980). The
European Jarque-Bera (1980) test indicates that the null hypothesis of the normality of
Journal regression residuals is also supported (χ22 = 1.23, p > 0.05). In addition, the
of Marketing Chow (1960) test (mid-point), which reports on the stability of the estimated
regression coefficients, confirms the null hypothesis of constant parameters
30,6 (F5,81 = 5.52, p > 0.05).

26 Discussion
Although those elements stimulating firms to export have been investigated by
a plethora of studies, a dearth of empirical attention has been paid to assessing
the effects that various stimuli have on the level of export performance. Our
results indicate that, among the six ES dimensions, only national export policy
(ES4) was found to be a determinant of export performance. Highlighting the
crucial role that the government can play in the development of successful
export activities, this finding gives credibility to the importance of those studies
focusing on the appraisal of public policy programmes for export promotion
(e.g. Kotabe and Czinkota, 1992; Seringhaus, 1986; Seringhaus and Botschen,
1991).
Internationalization theory suggests that managerial perceptions of export
problems affect the general behaviour of the firm in overseas markets (Johanson
and Vahlne, 1990). However, the effects (if any) of such problems on export
performance are more often assumed than analysed. The study reveals that
information/communication with the export market (EP1) is the only
significant EP dimension related inversely to export performance. Consistent
with previous evidence on export behaviour (Bonaccorsi, 1993; Yang et al., 1992;
Yaprak, 1985), this finding implies that information/communication with the
export market may be the most important barrier to overcome in attempts to
maintain regular business activities and, subsequently, succeed in export
markets.
In the light of the intensifying competitive climate throughout the EU, the
direct linkage of marketing capability (CA2) with export performance may be
connected with the importance, and considered a prerequisite for the adoption,
of market-led strategies (Piercy, 1989) as a means of survival and long-term
viability in export markets. It might be argued, however, that, for such
strategies to be effectively designed and implemented, other firm competences,
such as production capability, product superiority and competitive pricing,
albeit not directly related to export performance, are also likely to be essential.
This suggests that export marketing strategy may play a moderating role
between the possession of competitive advantage and export performance,
which in turn could explain the lack of significance in the relationships of
export performance with those CA dimensions.
Turning to the effects of export commitment variables, the study has
revealed a strong positive relationship of export marketing research (COM4)
with export performance. Foreign market information acquisition reduces
“psychic distance” and enhances knowledge of export market practices
(Douglas and Craig, 1983; Seringhaus, 1986) thereby according with Johanson
and Vahlne’s (1990) contention that export market knowledge generates Determinants of
business opportunities and consequently drives the internationalization export
process. performance
Furthermore, in contrast with initial expectations, the study identified
export planning and control (COM5) as a negative correlate of export
performance. This result may be explained by the lack of specialized personnel
in the planning and control function of Greek firms (Koufopoulos and Morgan, 27
1994). Hence, the cost associated with the development of export planning and
control activities might be an inhibitor for those manufacturers, leading to
lower export performance. It can further be upheld in view of Samiee and
Walters’ (1991) findings that a major source of strength for regular exporters is
their capacity to be flexible and adaptable to transient opportunities in export
markets. Therefore, those firms instituting formal export planning and control
procedures may be unable to capitalize on a considerable number of attractive
overseas market opportunities, that necessitate immediate strategic response
(Walters and Samiee, 1990).
The evidence provided here does not suggest that there is a direct
relationship between firm size and export performance, as initially
hypothesized. Although not directly comparable, this finding gives some
credibility to Bonaccorsi’s (1992) arguments questioning the validity of the
assumptions underlying the widely accepted proposition of a positive
relationship between firm size and export performance. Similarly, neither
dimension of exporting experience appears to have a direct connection with
export performance. This contradicts a widely held belief: firms possessing
relatively high levels of experiential knowledge about exporting operations are
likely to perform better than less experienced exporters. However, as the
present finding may be attributable to our focus on firms engaged in regular
export activity, more research is needed to investigate this issue across different
export development stages before firm conclusions can be drawn.
The question which may further be raised is whether company size and
exporting experience should be treated as antecedents of those variables, such
as export stimuli, exporting problems, competitive advantages and export
commitment, that directly affect the export performance of the firm. It may then
be possible to provide an explanation for the importance attached in the extant
literature to firm size and exporting experience as determinants of export
behaviour.

Summary and conclusions

The present research effort differs from previous empirical export marketing
studies in several ways. First, it is concerned with the exporting operations of
firms from a relatively small EU country, whose economic development is
highly dependent on its trading activities with the other Union members.
Second, it focuses on the export performance of regular exporters, as distinct
from the investigation of those elements that account for the initial export
involvement of the firm. Third, the research design adopted considers firms’
European exporting activities within the context of both a specific export destination and
Journal a specific export market entry approach, rather than generalizing across
of Marketing foreign markets and entry modes. Fourth, following Aaby and Slater (1989), a
robust unidimensional composite export performance measure has been
30,6 developed, consistent with the thesis of Buckley et al. (1988) on the dynamics
pertaining to the underlying relationships of export performance facets.
28 Based on the importance attached in the exporting literature to internal and
external factors as determinants of export behaviour, a comprehensive model of
export performance has been proposed herein. The model integrates key firm
characteristics, export commitment and export-related perception variables.
The relational connections of these variables with export performance have
been examined collectively and simultaneously, rather than on a univariate
basis. This identification of explanatory variables of firm performance in
export markets can provide valuable guidelines on the formulation and
implementation of both export marketing plans and national programmes for
export promotion. In this final section, we begin with the conclusions drawn
from the research findings in relation to business practitioners and public
policy makers, and will follow with the limitations of the study, alongside the
opportunities for future research.

Implications for management and public policy

The lack of significance in the relationships of firm size and exporting
experience with export performance provide a crucial message for both smaller
firms and less experienced exporters. It is important that top management of
such companies should not consider their small size or limited exporting
experience to be in dissonance with their ability not only to establish, develop
and sustain regular export activity, but to attain satisfactory performance
levels in overseas markets.
Since the adoption of an export approach based on marketing capability is
intrinsic to export performance, it is essential that substantial export
marketing skills be augmented and maintained among those firms pursuing
regular export operations. Further, exporting manufacturers are more likely to
perform well in export markets when they commit adequate resources to
undertaking export marketing research. Despite the difficulties and costs
involved, the adoption of such activities would be tantamount to reducing the
relatively high level of uncertainty which is likely to surround international
marketing decisions.
The study highlights the crucial role that the government can play in
facilitating company performance in export markets, by stimulating regular
export activity at the individual firm level. It is thus necessary that effective
national export policies are formulated, with the focus on stimulating ongoing
export activities by local manufacturers. Such policies should be regularly
assessed and adjusted on the basis of both market developments and exporter
requirements.
 Knowledge-based programmes may become an important part of Determinants of
governmental export policies. Specifically, public export promotion export
administrators may find it prudent to prioritize the provision of information performance
about foreign markets and operations. Particular attention may further be paid
to the design and implementation of export marketing education and training
programmes among business practitioners. The development of such a policy
could be considered in the context of major programmes on general 29
management education organized under the aegis of the EU, such as those
incorporated into the Strategic Programme for Innovation and Technology
Transfer among the Union members.

Limitations and implications for future research

The evidence reported in this paper should be interpreted in the light of several
limitations. Notably, this research effort was restricted to manufacturing firms
of a certain industrial sector within a specific “small country” context, thus
caution may be exercised in generalizing the present findings too broadly.
Testing the external validity of our findings would ideally necessitate
replication of this study within other countries and/or industries. Realistically,
nonetheless, generalizations of the study findings may be applicable to those
exporting frameworks with similar structural characteristics and export
marketing contingencies, of which there are many.
The cross-sectional nature of the data limits our ability to rule out cause-
effect inferences. Research efforts involving dynamic phenomena such as firm
performance in export markets may require a temporal focus. Although costly
and time-consuming, the adoption of longitudinal approaches in future
empirical studies can provide more insights into the dynamic aspects of export
behaviour and performance.
Moreover, no account was taken of firm dependence on export markets in the
determination of export performance. It has been found elsewhere that the
extent to which a firm is dependent on exporting operations influences its
export behaviour (e.g. Cavusgil, 1984; Cooper and Kleinschmidt, 1985;
Diamantopoulos and Inglis, 1988). Future studies would contribute to existing
knowledge by incorporating export dependence into the analysis of export
performance. Based on Aaby and Slater’s (1989) suggestion that export
dependence could be a moderator between export performance and its
proposed determinants, it might then be possible to provide an explanation for
the lack of a relationship between several of the independent variables and
export performance identified in the present study.
Although our study can further be extended in several directions, two would
be particularly important to both corporate and public policy decision makers.
One suggestion is grounded in recent evidence in the field of strategic alliances
that future performance expectations affect current performance levels
(Parkhe, 1993). It may also be intuitively appealing to suggest that a reverse
relational connection is possible. The implication of this in the export
marketing area is that future modelling frameworks may focus on the analysis
European of those factors that determine this simultaneous relationship between
Journal perceptions of export performance expectations and those of current export
of Marketing performance. Another interesting extension is connected with Gripsrud’s (1990)
conceptualization of decisions and attitudes towards future exports.
30,6 Specifically, research efforts can be directed towards examining the extent to
which export performance and its determinants affect firms’ future behaviour
30 in export markets.
Notes
1. The magnitude of this problem may somewhat be moderated when relative market share
evaluations are employed, as both the sum constraint (the individual market shares should
add up to 100) and bound constraint (the individual market shares should range from zero
to 100), two essential conditions here, are satisfied (Szymanski et al., 1993).
2. Buckley et al. (1988) provide a classificatory scheme of export performance assessment by
level of analysis: country, industry, firm and product. In this instance, the authors’
arguments, connected with the industry level of analysis, can well be extended to export
performance evaluation at the firm level.
3. In an attempt to overcome certain innate drawbacks implicit in several exporter
classification schemes identified in the literature, Samiee and Walters (1991) pursue a
distinction between sporadic and regular exporters. It appears that the export function is
underdeveloped among sporadic exporters. These firms pay relatively limited attention to
their export marketing activities, in comparison with regular exporters. The authors also
suggest that many sporadic exporters do not intend to follow a pattern of natural
development to becoming regular exporters (p. 101) Thus, national export policies aiming
to convince such firms to become more active in exporting are likely to be ineffective.
4. A distinction has been made in the literature between experiential and objective
knowledge development in relation to overseas markets and operations (Johanson and
Vahlne, 1990; Seringhaus, 1993). We refer to experiential knowledge which is developed on
the basis of information obtained through direct market and customer contact (e.g.
participation in trade fairs/missions, international market research, or personal visits
overseas) (Kotabe and Czinkota, 1992; Seringhaus, 1987). Gaining such knowledge is
critical to exporters as it facilitates the identification of foreign market opportunities,
which in turn leads to export market commitment decisions (Bonaccorsi, 1993; Johanson
and Vahlne, 1990; Seringhaus, 1991). It is different from objective knowledge which is
linked to indirect foreign market information acquisition, primarily through published
reports or statistics from various governmental agencies (Seringhaus, 1986/87).
5. It is widely accepted that firms typically grow and develop domestically before becoming
involved in international activity (Welch and Wiedersheim-Paul, 1980; Yang et al., 1992).
6. The authors acknowledge the relevance of an anonymous EJM reviewer’s suggestion that
consideration be given also to the number of export transactions and customers served, in
assessing the scope of a firm’s exporting experience. This would be particularly important
where different exporter categories are examined. Nonetheless, due to our focus on regular
exporters, and concerns over the length of the survey instrument, in this study
measurement of such experience was based on the number of countries to which the firm
regularly exported, as in Kogut and Singh (1988).
7. Initially, both size proxies were included in the regression. Neither of them was found to be
significant. To detect whether such a finding was due to the possible existence of
collinearity between the two proxies, the model was rerun using one size indicator at a
time. Again, they were found insignificant.
8. In addition to export performance (dependent variable), the inclusion of each of the ES, EP
and CA dimensions (as independent variables) in regression analysis was based on factor
 scores calculated by the command SAVE REG (ALL FSULS) under the procedure FACTOR Determinants of
in SPSS. The evaluation of the final regression model was performed in the computer
program TSP, which enables testing for the absence of misspecification. export
9. These variables retained the same sign throughout the procedure for a parsimonious performance
model. This indicates that the direction of their impact was independent of the other
variables included in the initial model.
10. While the initial model included 26 independent variables, the final model included five
significant variables. The implied exclusion restrictions of the 21 variables were tested on 31
the basis of the sum of squared residuals of the initial and final models. The obtained value
of the relevant test statistic, F21,61 = 0.44, is well below the critical value at conventional
levels of significance. Thus, the exclusion of those variables did not worsen the
performance of the final regression model.
11. In the context of export stimuli, national export policy is seen as a proactive motivation
factor to a firm’s involvement in exporting activities (Johnston and Czinkota, 1982). Thus,
the positive sign of the relevant regression coefficient supports H3.
12. The heteroskedasticity test is indicative of the absence of the exclusion of relevant
explanatory variables. If such variables had been excluded from the model, then the
residuals of the final regression would have exhibited heteroskedastic properties. This is
because the variance would have been a function of the excluded exogenous variables
(Green, 1993).

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