A conceptualisation of direct and indirect impact of export promotion programs on export performance of SMEs and entrepreneurial ventures.

Shamsuddoha, A.K. ; Ali, M. Yunus ; Ndubisi, Nelson Oly 等

INTRODUCTION

Export plays an important role in a nation's economic prosperity. A country's ability to compete successfully in the world markets, ability to maintain a favorable balance of trade, and ability to control its external payment situation, reflect the economic strength and marginal competence of the nation. Government plays a key role in stimulating international business activity of domestic firms through export promotion programs (Cavusgil and Michael, 1990). From a government's point of view, offering export support programs is intended to improve the international competitiveness of domestic firms. From a firm's perspective, export promotion measures reinforce the motivations to export. These motives include exploitation of technological and locational advantage, the ability to offer unique products, the maximization of comparative marketing advantages, and the need for market diversification (Seringhaus and Rosson, 1990). The use of export promotion programs (EPPs) provides better pay-off in terms of a firm's competitive position (overall strength of the firm) and efficiency (profitability). Moreover, it reflects in export performance of existing exporters while encouraging more firms to export (Czinkota, 1996; Gencturk and Kotabe, 2001; Francis and Collins-Dudd, 2004). Despite the propagation of their benefits, the empirical evidence to substantiate the rationale for use and demonstrate the effectiveness of export promotion programs on firm export performance is either "limited and mixed" (Kotabe and Czinkota, 1992: 640) or conflicting (Lages and Montgomery, 2005). Though export marketing has evolved into an integrated and systematic field of study over the years (Balabanish, Theodosiou and Katsikea, 2004), the role of export promotion programs on firm export performance has not received much scholarly attention (Francis and Collins-Dudd, 2004). In fact the conceptualisation of the relevant constructs and their interrelationships is far from holistic and comprehensive. It is in fact very narrow.

It has been argued that government export promotion programs as an external environmental factor define the premise for successful exporting activities of the corporate sector and play a key role in stimulating international business activity of domestic firms (Cavusgil and Michael, 1990; Seringhaus and Rosson, 1990; Marandu, 1995; Wilkinson, 2006). An extensive search of the literature reveals that most mainstream studies on export performance are narrowly focused on firm- and management-related internal determinants. Not many past studies have even explored the impact of export promotion programs on firm export performance in a rigorous and systematic manner. Only studies by Donthu and Kim (1993) and Katsikeas, Piercy and Ioannidis (1996) make some attempts to formalize the relationship. While Donthu and Kim (1993) found a positive relationship between firms' usage of export assistance and export growth, Katsikeas, Piercy and Ioannidis (1996) found national export promotion policy to be an export stimulus, positively influencing export performance.

Export promotion programs related studies have mostly concentrated on developing and targeting export promotion programs, and implicitly offered guidance to export assistance providers regarding the allocation of their resources and the content of their programs (Kotabe and Czinkota, 1992; Moini, 1998; Seringhaus and Botschen, 1991). However, only a few studies have examined the direct relationship between the usage of export promotion programs and export performance (Francis and Collins-Dodd, 2004; Gencturk and Kotabe, 2001; Marandu, 1995; Singer and Czinkota, 1994). Research results reveal that the extent of usage of export promotion program is positively related to the 'number of export outcomes achieved' (Singer and Czinkota, 1994), firm's extent of efficiency and competitive position in exporting (Gencturk and Kotabe, 2001), and the achievement of export objectives, export competence and export strategy of different categories of exporters (Francis and Collins-Dodd, 2004). Despite the significant contributions of these studies in conceptualizing the effect of EPPs on firm export performance, none of them has investigated the complex interrelationship among different factors in the export promotion programs and export performance. A recent study by Lages and Montgomery (2005) empirically tested the mediating effect of pricing strategy adaptation on the export assistance and export performance relationship. Interestingly the total effects of export assistance on annual export performance improvement was found non-significant because the direct positive effect on performance was severely affected by its negative indirect effect through export pricing strategy adaptation. The unexpected negative indirect effect was seen as a peculiarity of the country context, where price adaptation strategy assisted by Portuguese government export promotion programs was found dysfunctional (Lages and Montgomery, 2005). This unexpected result indeed requires further investigation using relevant theoretical basis.

The complex relationship between export promotion programs and export performance can be explained using internationalization process theory and resource-based theory. Internationalization process theory indicates how gradual knowledge acquisition leads to greater commitment to exporting and international operations (Johanson and Vahlne, 1977). Resource-based theory proposes that competencies in the form of knowledge and expertise are critical to superior organizational performance (Barney, 1991; Coff 1997). While these competencies are internal and are acquired by firms, export promotion programs help firms to obtain the information, knowledge, experience, and resources they need to develop an export strategy and achieve better performance (Singer and Czinkota, 1994). This suggests that government export promotion programs help develop firm and managerial capabilities such as knowledge and skills, and commitment that influence a firm's export strategy and performance. More candidly, government export promotion program not only influence export performance directly (Donthu and Kim, 1993; Katsikeas, Piercy and Ioannidis, 1996; Francis and Collins-Dodd, 2004; Gencturk and Kotabe, 2001), but also influences firm export performance indirectly by directly contributing to firms' information gathering, knowledge and skill building, perception improvement and increasing commitment. This paper conceptualizes the indirect effects of export promotion programs on firm export performance through a number of firm- and management-related antecedents of export performance. It also discusses the conceptual model of firm export performance and highlights the possible theoretical and practical implications of this framework.

LITERATURE REVIEW, CONCEPTUALISATION OF THE RELATIONSHIPS, AND HYPOTHESES

A review of the theories of internationalization, export behaviour and performance literature suggests that firm export performance is likely to be highly correlated with key decision makers' international business attitudes, commitment, knowledge and skills (Aaby and Slater, 1989; Cavusgil and Zou, 1994; Donthu and Kim, 1993; Evangelista, 1994, 1996; Johanson and Vahlne, 1977; Katsikeas, Piercy and Ioannidis, 1996; Moen, 2000; Capel, Ndubisi and Hamid, 2008; Wang and Olsen, 2002). Similarly, positive strategy-performance relationship is well accepted in the literature (Aulakh, Kotabe and Teegen, 2000; Cavusgil and Zou, 1994; Kleinschmidt and Cooper, 1984; Leonidou, Katsikeas and Samiee, 2002; Morgan, Kaleka and Katsikeas, 2004). A few studies have revealed direct impact of export promotion on export performance, but its impact on the abovementioned determinants of export performance has not attracted adequate research attention. Drawing on the extant literature on export performance and export promotion, the proposed conceptual model integrates export strategy, management perception of export market environment, export knowledge, export commitment, and use of export promotion programs that influence export performance of a firm. While the other variables are incorporated into the model, this article focuses on the impact of EPPs on these variables in a fully mediated model where the effect of EPPs on firm export performance is mediated by these firm- and management-related factors.

The methodological problem of measuring the impact of export promotion programs is another critically pressing issue in the literature. One side of the problem is the use of proxy measures to examine program effectiveness through measuring managers' awareness, usage and satisfaction of the programs (Ali, 2000; Marandu, 1995). These certainly measure effectiveness of marketing the programs by providers rather than effectiveness of the program itself (Francis and Collins-Dodd, 2004). The other side of the problem is the development of a workable measurement method to assess the impact of export promotion programs on export performance (e.g. economic, non-economic or achievement of objectives) or firm and managerial capabilities. Most of the prior studies examining the impact of export promotion programs on firm export performance in a relatively rigorous model have used a global measure (Francis and Collins-Dodd, 2004; Gencturk and Kotabe, 2001; Singer and Czinkota, 1994). Since different assistance programs are designed for different target audience in mind, the global measure cannot capture the impact of a category of programs designed to achieve specific objectives. For example, export workshops and seminars, trade missions, marketing assistance for exporting new product, overseas promotion of the firms' products, assistance in establishing contact with the foreign buyers and establishing sales and display centres abroad, providing market information, are usually designed for initial exporters to develop their foreign markets. On the other hand, income tax rebate, credit guarantee, insurance facilities and duty drawback programs are designed for more advanced level exporters. Export promotion programs, therefore, can be classified into two major categories in terms of the broader purposes of use: market development-related programs, and finance and guarantee-related programs. These two categories of export promotion programs will be used in the proposed conceptual model.

The Conceptual Model

The conceptual model presented in Figure 1 shows complex relational links in the export promotion program and export performance relationship. The first part of the model conceptualizing the relationships between the usage of market development, finance and guarantee related EPPs, and different firm- and management-related antecedents of firm export performance. That encompasses the core research focus of this paper. The widely tested relationships between the firm- and management-related variables and firm export performance are hypothesized at the end of the model to demonstrate the indirect impact of EPPs on firm export performance in the comprehensive model.

[FIGURE 1 OMITTED]

Use of Export Promotion Programs and Management Perception of Export

The management perception of the overall environment of a foreign market is an important factor for a firm to consider exporting or expanding export activities. Managers' favourable attitudes towards the foreign market environment normally encourage them to consider exporting as an attractive growth potential of the firm. Perceptions relate to managers' levels of awareness of, and concerns about, external environment, particularly international market opportunities and threats, attractiveness of export, obstacles, competitive position, risks and returns (Schlegelmilch, 1986). Eshghi (1992) argues that committed exporters' assessment of exporting risks and returns is much more positive than non-exporters. Any firm planning to internationalize should adequately understand the foreign market environment. However, because of the complexity of the international business environment and the comparative scarcity of resources, small and medium-sized enterprises (SMEs) are at a disadvantage if they decide to compete internationally (Ramaswami and Yang, 1989; Seringhaus and Botschen, 1991; Seringhaus, 1986, 1987). The uncertainties of the exporting, ignorance about foreign markets, and the daunting nature of exporting processes all militate against such firms becoming committed exporters (Seringhaus and Rosson, 1990; Weinrauch and Rao, 1974).

Silverman, Castaldi and Sengupta (2002) found that firms without export experience have a wide range of information needs in order to overcome perceived external barriers. Nontheless, many of these firms may not realize the services of public-sector organizations to satisfy their information needs. A major impetus for export development and success is the need to develop the capability required to manage exporting problems (Yang, Leone and Alden, 1992). Wiedersheim- Paul and his colleagues (1978) propose that pre-export activities, particularly the level of a firm's activity in information search, are a major indicator determining the likelihood of a firm to export. As a result, firms must increase their ability to gather information so that they can react appropriately to environmental changes and adopt proactive strategies for the international market.

Government export promotion programs include a variety of initiatives to deal with different export barriers. Some of these initiatives (such as seminars) highlight the benefits of export involvement, thus providing a motivational boost to reluctant managers (Seringhaus and Rosson, 1990). Other programs (such as market reviews and overseas visits) help companies to assemble timely and inexpensive foreign market information, and so deal with the informational barriers. The operational/resource-related barrier is also dealt with in various ways (such as bid preparation and trade fair participation), easing the burden facing many new or expanding exporters. Therefore, export promotion programs are not only designed to provide foreign market information and financial support; primarily they encourage firms to export by propagating the benefits of exporting and motivating them to explore foreign markets. This helps overcome mental barriers and develop positive perception in managers toward exporting operation. The above normative logic is used to conceptualise the relationship depicted in the theoretical framework to guide further research. Therefore, we can propose that:

The use of market development-related export promotion programs is positively related to favourable management perception of the export market environment (Proposition 1).

Use of Export Promotion Programs and Export Knowledge

Export knowledge is the knowledge possessed by the exporter about how to market the firm's products and services abroad (Seringhaus, 1993). Wang and Olsen (2002) identify two types of export knowledge as having critical bearings on a firm's exporting success: knowledge of exporting procedures and knowledge of the foreign market. Knowledge of exporting procedures enables the firm to deal effectively and efficiently with exporting procedures such as financing, shipping and forwarding, processing paperwork, and receiving payment. Knowledge of foreign market includes understanding of the macro- and microenvironment, infrastructure, buyer behaviour of the foreign market, and the knowledge of how to effectively deal with these market factors. Export knowledge in this context relates to both exporting procedures and the foreign market. Both objective and experiential knowledge are needed for overseas expansion of a firm (Johanson and Vahlne, 1977). Objective market knowledge can be "taught" (Johanson and Vahlne, 1977, p. 28) or "obtained from secondary or primary sources" (Seringhaus, 1986, p. 27). On the other hand, experiential knowledge "can only be learned through personal experience" (Johanson and Vahlne, 1977, p. 28) and "must be personally acquired through direct market or customer contact" (Seringhaus, 1986, p. 27). Johanson and Vahlne (1977) argue that experiential knowledge is the critical kind of knowledge because it provides the framework for perceiving and formulating opportunities. Experiential knowledge enables managers to recognize export opportunities, to evaluate them, to adopt the appropriate export behaviour, and to achieve their export objectives. With experience and learning, the firm develops competencies to become a committed and regular exporter (Johanson, et. al., 1976). Wang and Olsen (2002) also suggest that the firm's export-related knowledge and marketing expertise positively affect export performance. So, it has become increasingly apparent that the critical factor in competing in foreign markets is knowledge and expertise.

Export promotion programs in general facilitate acquisition of knowledge. Initially an uninterested firm become aware of foreign markets through export promotion programs (advertising, export workshops and local seminars), gains interest in exploring opportunities and starts sporadic exporting to gain first-hand experience of the trade. Some programs (eg. providing export information related publications, list of agents and distributors in foreign markets, sales leads, export training) are designed to provide objective knowledge to explore exporting. Other programs (such as export planning support, trade fairs, and trade missions) enable managers to gain the experiential knowledge. Most of the export promotion programs are designed to improve management quality and enhance its knowledge and expertise in developing export markets. Once the firm passes the cultural barriers and has its first experience of foreign operations with the help of export assistance programs, it generally increases commitment to export and willingness to conquer one market after another (Johanson and Vahlne, 1977; Lages and Montgomery, 2004). The more managers gain international experience, the more they use assistance programs (Lages and Montgomery, 2005). This occurs because assistance programs help to accelerate the acquisition of objective and experiential knowledge, and develop firms' competitive competence (Singer and Czinkota, 1994). Gencturk and Kotabe (2001) also argue that export assistance programs are important resources for building necessary knowledge and experience for successful foreign market involvement. We propose that:

The use of market development related export promotion programs is positively related to firm's export knowledge (Proposition 2)

Use of Export Promotion Programs and Export Commitment

Organizational commitment to exporting is defined as a general willingness by management to devote adequate financial, managerial and human resources to export related activities (Aaby and Slater, 1989). Commitment is made up of two components: attitudinal and behavioural (Axinn and Athaide, 1991). The attitudinal component is analogous to the cognitive and affective elements of attitude and has been referred to in other studies under such labels as favourability of management's expectations, perceived attractiveness, or management's perception, of the benefits and risks associated with exporting (Cavusgil and Nevin, 1981; Aaby and Slater, 1989). Styles and Patterson (2005) in a recent study used the Theory of Reasoned Action (Ajzel and Fishbein, 1980) to explain managers' attitudinal and behavioural commitment to exporting. The behavioural component refers to the expenditure of considerable effort and resources associated with export related activities (Axinn and Athaide, 1991) or the extent of resource allocation or resource commitment (Cavusgil, 1984).

A large export development budget and a specialized export management staff have been seen as critical to successful business performance in foreign markets (Cavusgil and Zou, 1994; Evangelista, 1994). These studies suggest that management should increase its commitment to exporting by investing greater resources in export management and enhancing the firm's competence to increase their export sale. Many of the tasks associated with export marketing are new to firms, and they require additional financial and human resources. These tasks include gathering foreign market information, hiring and training new staff, learning about export tasks such as documentation and export financing, and formulating basic planning toward export marketing. The "management element" is crucial in carrying out these tasks (Cavusgil and Naor, 1987). Therefore, top management's reluctance to allocate sufficient resources for exporting, especially those related to building the exporting infrastructure, is a significant deterrent to export marketing.

Public institutions in the form of export promotion programs do play a major role in creating management commitment to exporting. Some of these programs (advertising, local seminars, workshops, training) highlight the benefits of export involvement, thus providing a motivational boost to reluctant managers. The theory of reasoned action (TRA) is at work at this stage in boosting management commitment through boosting social and national feelings. Other programs (such as overseas visits, and export market information) help firms to assemble timely and inexpensive foreign market data, and so deal with the informational barrier. The operational and resource-based barrier is also dealt with in various ways (trade fair participation, subsidy on product/productivity development or market development activities, income tax rebate, rebate on insurance premium, duty drawback scheme on imported materials and capital goods), easing the burden of many new or expanding exporters. An export credit guarantee scheme (pre and post-shipment credit guarantee, export payment risk guarantee) reduces risk on export credit, commercial and political risks, and thereby encourages managers to commit more resources toward exporting. Government export promotion programs make an important indirect contribution to create a pro-exporting attitude and assist in making exporting a positive social experience for the firm. This, in turn, fosters a high level of export commitment. Cavusgil and Nevin (1981) argue that managers who have committed themselves to exporting, and actually engage in it, invariably take a more positive view on foreign operations. When managers become more competent in exporting through acquiring knowledge, they commit more resources to exporting. Singer and Czinkota (1994) found that, managers who were committed to use greater number of export promotion programs, tended to perform more pre- export activities and achieve better export performance than those who used less or none. This clearly indicates that managers' greater use of export promotion programs encouraged them to commit more time and resources toward information gathering, export planning, establishing export market contacts and developing marketing channels to achieve their export objectives. However, lack of further empirical findings to support this argument requires an investigation to explore the following propositions.

A firm's export commitment is positively related to the use of market development- related export promotion programs (Proposition 3).

A firm's export commitment is positively related to the use of finance and guarantee- related export promotion programs (Proposition 4).

Export Knowledge and Management Perception of Export

The theoretical explanation for the relationship between ongoing export stimuli and the level of export development rests with the issue of uncertainty and the way in which firms cope with it (Erramilli, 1991). Exporting knowledge and information gaps in many firms contemplating export market entry create a barrier (Reid, 1984) and subsequently discourage many firms from pursuing exporting as an ongoing activity. Therefore, it has been suggested that acquisition of knowledge through experience from business operations in a specific overseas market is the primary means of reducing foreign market uncertainty and consequently becomes a driving force in the internationalization of the firm (Davidson, 1982; Johanson and Vahlne, 1977, 1990). Those firms with a high degree of international exposure are generally more able to manage and overcome potential barriers in export markets. As a firm gains more market experience and knowledge, it gradually gains positive perceptions of export market environment. Gripsrud (1990) argued that the more experienced the firms were in exporting to a foreign market, the more positive the attitude they would have toward that market. The resource-based theory also proposes that objective and experiential knowledge/skills are intangible firm capabilities that create sustainable competitive advantage for the firm and help performance better than competitors (Hamel and Prahalad, 1994). This suggests the following proposition:

Firms' export knowledge is positively related to the management perception of favourable export market environment (Proposition 5).

Export Knowledge and Export Commitment

Internationalization process theory (Johanson and Vahlne, 1977, 1990) focuses on firms' gradual acquisition, integration and use of knowledge about foreign markets and operation, and on its successively increasing commitment to foreign markets. According to this, the lack of knowledge and resources is an important obstacle to internationalisation but this can be reduced through learning about the foreign markets and operation, thus shifting incremental decision-making toward further internationalisation (Johanson and Vahlne, 1977, 1990). This indicates a direct relation between a firm's knowledge acquisition and increasing commitment to international operation. Resource-based theory posits that capabilities as organisational processes combine and transform available firm resources into deployable value offerings for (export) markets toward achieving competitive advantage (Amit and Shoemaker, 1993; Day, 1994; Morgan, Kaleka and Katsikeas, 2004). Export knowledge as a valuable resource input (preferably a dimension of the human resources) to the complementary capabilities can assist a firm leverage its product and other marketing capabilities for the foreign market (Morgan, Kaleka and Katsikeas, 2004), and consequently contribute to better performance experience and increased export commitment (Lages and Montgomery, 2004). This suggests that the better the tacit and experiential knowledge about an export market, the more the firm can leverage its other resources and capabilities for better performance and the stronger is the commitment to the markets. Johanson et al. (1976, p. 37) also argues that the experiential information "enables us to perceive opportunities for new or enlarged business activities ... [and] serves as input in the decision process that will eventually lead to commitment decisions". Therefore, the following hypothesis could provide further revalidation to the theories:

Firm's export knowledge is positively related to export commitment (Proposition 6).

Export Knowledge and Firm Export Strategy

Traditionally, the export marketing strategy has been defined in terms of market selection (i.e., degree of world wide orientation and market segmentation) and product strategy (Ames, 1968; Cooper and Kleinschmidt, 1985; Corey, 1962). Contemporary marketing focuses not only on product strategy but also on integrated marketing activities, i.e., product, price, promotion and distribution (Cavusgil and Zou, 1994; Namiki, 1994; Zou, Andrus and Norvel, 1997). However, export strategy in this context relates to the strategies covering identification of export customers, developing strategies for competing in export markets (cost leadership, marketing and service differentiation), establishing distinct goals and objectives for export operation, developing capabilities to collect necessary information, providing sufficient budget to exploit overseas markets and identifying export countries to enter.

A firm's physical resources (production facilities, access to valuable supply sources), experiential resources (market and operating knowledge) and its capabilities (the mental models of its managers) interact to create competitive advantage (Day, 1994; Mahoney, 1995). McKee and Varadarajan (1995) argue that competitive advantage is the cornerstone of strategy, and enacted knowledge is the essence of competitive advantage. Lack of this knowledge makes exporting more risky (Sullivan and Bauerschmdt, 1989). Improved export knowledge significantly reduces the perceived barrier and complexity of exporting and help to implement proactive export marketing strategies. Singer and Czinkota (1994) found that export knowledge increases pre-export activities such as decision, planning, contacts and channels. Morgan, Kaleka and Katsikeas (2004) also reported a positive impact of available resources (knowledge, scale and physical) on export venture competitive strategy. Therefore, knowledge may help a firm select its export markets and formulate and implement its proactive marketing strategies more effectively (Cavusgil and Zou, 1994; Douglas and Craig, 1989). This leads to the following proposition:

Firms' export knowledge is positively related to firms' export strategy (Proposition 7).

Management Perception of Export Market Environment and Export Strategy

Effective exporting requires development of comprehensive export strategies that take into consideration differences in the international market environment (Jain, 1989). Managers' perceived level of risks about the export market environment as well as perceived benefits of exporting significantly affects their export decision (Styles and Patterson, 2005). Managers who perceive the export market environment unfavourably tend to avoid any involvement in exporting and in developing proactive export strategies (Axinn, 1988). Those who perceive the export environment favourably tend to search for and organize the acquisition of information to make proactive export strategies and rational market entry decision (Sood and Adams, 1984). Moreover, Axinn (1988) posited that managers' positive perceptions of the relative advantages and complexity of exporting are important for export strategy making. Other studies also reveal that decision makers who have positive perceptions of the foreign market environment (cost, profit, risk etc.) invariably take a more positive view on foreign operations and adhere to more export marketing planning (Johanson and Nonaka, 1983; Simpson and Kujawa, 1974). Based on the above rationale, the following hypothesis is proposed:

Management perception of favourable export market environment is positively related to firms' export strategy (Proposition 8).

Export Commitment and Firm Export Strategy

Many researchers assert that interest and commitment among the top management levels is a critical determinant in carrying out the export marketing functions (Benito and Welch, 1997; Hunt, Froggatt and Hovel, 1967). A favourable orientation, deliberate interest, and the willingness to devote adequate resources to export related activities have been emphasized. The willingness of the top management to commit resources to the formulation and implementation of export marketing strategies is an important ingredient needed to produce an aggressive international marketing strategy (Lim, Sharkey and Kim, 1993). Limited resources commitment is likely to result in significantly less formal market research, product and service differentiation and other competitive strategies. When managers are committed to the export, they carefully plan the market entry based on their capabilities and allocate sufficient managerial and financial resources to improve offerings for the target export market. With formal planning and resource commitment, uncertainty is reduced and marketing strategies can be implemented effectively (Aaby and Slater, 1989; Christensen, da Rocha and Gertner, 1987). Though the relationship between export commitment and export strategy has been tested and supported extensively in the literature, the following proposition could be tested in the comprehensive model for further validation:

Firms' export commitment is positively related to export strategy (Proposition 9).

Export Commitment and Firm Export Performance

The amount of time and other resources which management expends on export defines the organizational commitment to export. Donthu and Kim (1993) refer to export commitment as management willingness to devote adequate financial and managerial resources to export related activities of the firm. Based on their comprehensive review Zou and Stan (1998) concluded that export commitment is a key determinant of performance, regardless of performance dimensions (they positive relation in 15 relationship contexts, but no relation was found in two contexts). High management commitment allows a firm to aggressively go after the export market opportunities and pursue effective export strategies that improve export performance (Koh, 1991). Most empirical studies reported a positive relationship between the commitment to export and export performance (for example, Ali, 2004; Evangelista, 1994; Gomez-Mejia, 1988; Seifert and Ford, 1989; Wiedersheim-Paul, Olson and Welch, 1978). Top management commitment has also been seen as critical to successful business performance in foreign markets, particularly during the early stages of internationalization (Madsen, 1994; Cavusgil and Zou, 1994). This leads to the following hypothesis to be tested in the proposed comprehensive model:

Firms' export commitment is positively related to export performance (Hypothesis 10).

Export Strategy and Firm Export Performance

Export strategy is the means by which a firm responds to market forces to meet its objectives. The export literature increasingly reflects the importance of strategy on export success (Aulakh, Kotabe and Teegen, 2000; Cavusgil and Zou, 1994; Kleinschmidt and Cooper, 1984; Moller, 1984; Yaprak, Sorek and Parameswaran, 1984). Empirical studies suggest that export performance is determined by export marketing strategies and managements' capability to implement the strategies as a whole (Aaby and Slater, 1989; Chetty and Hamilton, 1993; Cooper and Kleinschmidt, 1985; Cavusgil and Zou, 1994) as well as components of strategies such as export diversification (Aulakh, Kotabe and Teegen, 2000) pricing and promotion strategy (Kirpalani and Macintosh, 1980), product adaptation (Cooper and Kleinschmidt, 1985; Cavusgil and Zou, 1994; Koh, 1991), promotion adaptation (Namiki, 1994; Seifert and Ford, 1989; Zou, Andrus and Norvell, 1997), competitive pricing (Christensen, da Rocha and Gertner, 1987; Kirpalani and Macintosh, 1980) and pricing strategy adaptation (Cavusgil and Zou, 1994; Lages and Montgomery, 2005). A comprehensive review of the determinants of export performance revealed that general exporting strategy has received significant research attention but reported mixed results (Zou and Stan, 1998). While the examination of the impact of each component of marketing mix strategies or market entry strategies may have some significant implications for our understanding, managers should design a complete strategic mix for success in a selected target market (Leonidou, Katsikeas and Samiee, 2002). Therefore, this model focuses on export market strategy as a whole rather than any specific element of it. The proposed relationship to be tested is:

Firm's export strategy is positively related to export performance (Hypothesis 11).

DISCUSSION AND CONCLUSION

This paper presents a model where firm- and management-related factors serve as mediating variables to assess the indirect effect of Export Promotion Programs on Firm Export Performance. The model provides conceptual arguments that Export Promotion Programs play an important role in the export development process of a firm by contributing to a number of firm- and management- related factors that in turn affect firm export performance. Using the resource-based view of the firm, this model suggests that while firm resources and capabilities (firm's knowledge-base and managerial capabilities) are major determinants of performance, Export Promotion Programs facilitate the development of those resources and capabilities. Therefore, the model proposed a mediated effect in the Export Promotion Programs-Firm Export Performance relationship, where firm- and management-related variables are key mediators.

On the basis of the integrated conceptual framework of a firm export performance, important theoretical and practical (managerial and policy making) implications can be drawn. First, the model can contribute to the literature by conceptualising how export promotion programs indirectly influence firm export performance through firm- and management-related variables. While a few studies have examined Export Promotion Programs in the export performance model as export stimulating factor, researchers basically ignored this indirect effect. Second, those who examined its impact on export performance (Francis and Collins-Dodd, 2004; Gencturk and Kotabe, 2001; Lages and Montgomery, 2005), only examined the direct impact of global measures (all export promotion programs are measured collectively) of export promotion programs on firm export performance. This global measure is likely to fail in identifying the impact of different categories of programs (designed for different purposes). This proposed model contributes to the literature by examining the indirect impact of two main categories of export promotion programs offered by governments (foreign market development-related programs, and finance and guarantee-related programs) on firm export performance.

The Uppsala model of internationalisation of firms emphasizes on experiential knowledge toward developing commitment to export, but it does not explain how the export process of a firm might start in a developing country context where lack of resources and managerial capabilities of Small and Medium-sized Enterprises (SMEs) and entrepreneurial ventures is a norm. The proposed model suggests export promotion programs as sources of educational knowledge (such as, export seminar, trade show, trade mission, training, foreign market information, sales leads) that facilitate firm entry into the initial export stage to gain experiential knowledge. Low-interest loans, export credit guarantee, duty draw-back on imported materials and parts, income tax rebates and similar finance and guarantee related promotional programs provide much needed resources support to SMEs and entrepreneurship toward achieving experiential knowledge. Similarly, this proposed model explains how export promotion programs as sources of much needed resources in terms of knowledge, information and physical support services fill the gap of entrepreneurship and SMEs' internal resources toward achieving export goals in a developing country context. The proposed model can provide a guideline for managers of exporting firms, especially in developing countries, to benefit from export promotion programs in improving their positive attitude towards export, building knowledge base and enhancing commitment to exporting for better success in their international operations. Finally, government policy makers in developing countries can also benefit from the proposed model in designing appropriate export promotion programs to satisfy the needs of SMEs and entrepreneurial ventures for export knowledge and experience toward achieving the national objectives of economic growth through internationalisation.

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A. K. Shamsuddoha, University of Rajshahi, Bangladesh

M Yunus Ali, Monash University Malaysia

Nelson Oly Ndubisi, Nottingham University