The Effects of Prior Export Performance On Firms Commitment to Exporting and Marketing Strategy Adaptation to the Foreign Market: Evidence from Small and Medium-sized Exporters

The Effects of Prior Export Performance On Firms Commitment to Exporting and Marketing Strategy Adaptation to the Foreign Market: Evidence from Small and Medium-sized Exporters

By Luis Pilipe Lages, David Bruce Montgomery
2001Working Paper No. 1701

To the best of our knowledge, the international business literature has been examining performance exclusively as a dependent variable. In this paper we argue that performance should also be investigated as an independent variable. Using survey data of over 400 managers responsible for the main export ventures of Portuguese SMEs (Small and Medium Enterprises), it is shown that past performance plays a crucial role in building SMEs commitment to exporting and to the determination of their current marketing strategy. The findings also show that marketing strategy adaptation to the foreign market is particularly noted in firms exporting to the most developed markets, rather than in firms exporting to the most competitive environments. Future international business research is encouraged to develop a more in-depth understanding of why and how preceding performance affects a firms commitment to exporting. Similarly, future research should focus on understanding both the direct and indirect relationships between performance and marketing strategy. Such a focus has the potential to provide rich theoretical contributions and generate relevant managerial and public policy implications.

Keywords
export, foreign market development, indirect effects, structural equation modeling, performance