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Anisur R. Faroque Yoshi Takahashi
Export Assistance:
The Way Back and Forward
An Empirical Investigation into
Developing Country Born Globals
Anisur R. Faroque
Department of Management
University of Canterbury
Christchurch 8140, New Zealand
anisfaroque@hotmail.com
Yoshi Takahashi
Graduate School for International
Development and Cooperation (IDEC)
Hiroshima University
Higashi-Hiroshima 739-8529, Japan
yoshit@hiroshima-u.ac.jp
ISSN 2191-5482 e-ISSN 2191-5490
ISBN 978-1-4614-1295-3 e-ISBN 978-1-4614-1296-0
DOI 10.1007/978-1-4614-1296-0
Springer New York Dordrecht Heidelberg London
Library of Congress Control Number: 2011935989
The Author(s) 2012
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v
The authors are to be commended for the rigor and originality they demonstrate in
this work. Their study is founded on a comprehensive review of the literature, justi-
fying their applied focus on the network infuences on the performance of born
global businesses in a developing country. This detailed analysis of apparel export-
ers operating from Bangladesh opens up a new and interesting area for research. As
other developing countries increase their share of global sales in particular indus-
tries, it is likely that this work will become an essential starting point for further
research. The fndings that nongovernmental network partners provide more useful
advice than government agencies is one that may resonate through other countries,
including developed economies. Government`s more useful role is confned to the
fnancial support and incentives that are provided to such frms. It is, however, the
commitment to exporting that emerges as critical for performance, more so than
export strategy. The key then to enhanced export performance is to attract, reassure,
and motivate entrepreneurs in ways that strengthen their commitment to interna-
tional expansion. This I am sure is a message that will be heard well beyond the
Bangladeshi setting of the study.
Professor of Management R.T. Hamilton
University of Canterbury
Christchurch, New Zealand
Foreword
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vii
Thesis is the brainchild of a researcher, the fagship of his big words, thinking and
scholarship in the realm of academia. The brainchild of a researcher might be small,
even insignifcant; however, the pleasure he derives out of it is not small because it
is the product of the best ideas and efforts he has put together. I worked my fngers
to the bone to develop my MSc thesis at Hiroshima University. This SpringerBriefs
is part of that endeavor.
Little research on export performance and assistance is done in developing coun-
tries. This frustrated me while I was working on my MSc thesis. I was desperately
looking for some good studies on developing country frm/venture level export per-
formance. At a point in time I found some good papers that investigated the link
between export assistance and performance which encouraged me to continue my
search in this feld. Eventually, I came to realize that this could be a good research
topic in a developing country like Bangladesh which had achieved tremendous suc-
cess in apparel exports through preferential benefts of multifbre agreement (MFA)
as well as government export promotion schemes. I did intensive literature review
on export assistance and performance and eventually built a conceptual model. In
the mean time, I also happened to come across a new feld of academic enquiry
known as international entrepreneurship (IE) which was partly based on born
global (BG) phenomenon. Surprisingly, I observed that Bangladesh apparel indus-
try provides a good setting for research on BG frms because most frms in this
industry is dedicated to exporting to various countries from their inception without
any involvement in domestic markets.
In the frst chapter, we analyzed the existing literature on export assistance to
sketch a clear picture of the development in the feld and then did a stand-alone
review. In the second chapter, we empirically investigated the direct and indirect
effects of export assistance on export performance of Bangladesh apparel industry.
We do believe this study would contribute to export assistance literature in under-
standing the determinants of export performance of a developing country which has
made phenomenal growth in apparel export worldwide.
I am highly indebted to my MSc thesis supervisor Dr. Yoshi Takahashi for his
relentless guidance and continuous feedback without which it would be quite
Preface
viii Preface
impossible for me to produce this volume. Among those who encouraged me and
made me feel happy in my last few days in Hiroshima are Asim Das, Akhi Das,
Ranjan Saha Partha, Aparna Talukder, Shamsul Arefn, and Faijun Nessa Sameera.
My friend Muhammad Ruhul Amin and his wife Shiuli Pervin, my sister Sajeda
Akter Lily and brother-in-law Mozammel Haque, my nephews Nazmul Jahan
Foysal, S.M. Iftekharul Haque, and S.M. Ekramul Haque have been always great
inspiration for me.
Christchurch, New Zealand Anisur R. Faroque
ix
We would like to thank Mr. Muhammad Ahshanullah, assistant professor at United
International University, Bangladesh, for his generous support during pilot survey
in Bangladesh. We would also like to thank Dr. Yunus Ali, senior lecturer at Monash
University, Malaysia, who gave expert advice during questionnaire development
process. We further thank Professor Hamid Etemad, Professor Bob Hamilton, and
Dr. Sussie Morrish. Finally, we thank Nick Philipson and Charlotte Cusumano for
their support and A. Vinita for editing this volume.
Acknowledgments
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xi
1 Export Assistance: The Way Back and Forward ................................... 1
1.1 Introduction ........................................................................................ 1
1.2 Evolution of Export Assistance Literature ......................................... 2
1.3 Existing Reviews on Export Assistance ............................................. 6
1.3.1 Seringhaus (1986) .................................................................. 6
1.3.2 Diamantopoulos et al. (1993) ................................................. 7
1.4 Extending the Existing Reviews (1990 Onwards) ............................. 7
1.4.1 The Scope of the Review ....................................................... 9
1.4.2 Findings of the Review .......................................................... 10
1.4.3 A Framework of Export Assistance and Performance ........... 14
1.5 Conclusion/Future Directions ............................................................ 15
References ................................................................................................... 18
2 The Impact of Export Assistance on Born Globals: An
Integrative Network Perspective.............................................................. 25
2.1 Introduction ........................................................................................ 25
2.2 Literature Review ............................................................................... 27
2.2.1 Internationalization Process Theory ...................................... 27
2.2.2 Born Global Theory of Internationalization .......................... 28
2.2.3 Network Model of Internationalization.................................. 29
2.2.4 Knowledge-Based View ......................................................... 29
2.2.5 IP and BG Theories: An Integrative Perspective ................... 30
2.3 Conceptual Framework ...................................................................... 31
2.4 The Case of Apparel Export Industry of Bangladesh ........................ 34
2.5 Research Hypotheses ......................................................................... 36
2.5.1 Determinants of Foreign Market Knowledge ........................ 36
2.5.2 Determinants of Export Commitment .................................... 37
2.5.3 Determinants of Export Marketing Strategy .......................... 38
2.5.4 Determinants of Export Performance .................................... 39
Contents
xii Contents
2.6 Research Method ............................................................................... 42
2.6.1 The Research Setting ............................................................. 42
2.6.2 Sample and Data Collection Procedure ................................. 42
2.6.3 Survey Instrument .................................................................. 43
2.6.4 Measurement of Variables ...................................................... 43
2.6.5 Data Profile ............................................................................ 45
2.6.6 Measurement Estimation ....................................................... 45
2.6.7 Structural Model Estimation .................................................. 46
2.7 Discussion .......................................................................................... 52
2.7.1 Determinants of Foreign Market Knowledge ........................ 52
2.7.2 Determinants of Export Commitment .................................... 53
2.7.3 Determinants of Export Marketing Strategy .......................... 53
2.7.4 Determinants of Export Performance .................................... 54
2.8 Summary of Overall Results, Interpretation,
and Policy Implication ....................................................................... 56
2.9 Contributions of the Study ................................................................. 58
2.10 Limitations of the Study..................................................................... 59
2.11 Future Research Avenues ................................................................... 60
2.12 Conclusion ......................................................................................... 60
References ................................................................................................... 61
Appendix .......................................................................................................... 69
Overall Measurement of Model Results ..................................................... 69
Measurement of Export Performance ......................................................... 70
Network Relationships in Terms of Export Financial Assistance............... 71
Network Relationships in Terms of Export Marketing Assistance ............. 72
About the authors ........................................................................................... 73