The Impact of Relational Variables on Export

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The Impact of Relational Variables on Export Performance: An Empirical Investigation in Australia and the UK Chris Styles and Tim Ambler Australian Journal of Management 2000 25: 261 DOI: 10.1177/031289620002500302 The online version of this article can be found at: http://aum.sagepub.com/content/25/3/261

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The Impact of Relational Variables on Export Performance: An Empirical Investigation in Australia and the UK hy

Chris Styles i" Tim Ambler §

Abstract; The impact of relational -variables on export performance is

u~sted

across two

countries-the UK and Australia. The key drh'ers are shown to be two k;nds oj

(()J1unitment: to the market (country J. and 10 the relatLOnshlJ) with the distributor. hOlh o( 'which begm with experiential data gathenng, or social learning. The constructs are operationali ~ed and tested with data from the early stages of export vcnturcs by smail and medium si;:ed enterprises (SMEs). The results support the Importance ()fsociallear11ing and relational variables to export performance.

Keywords: EXPORT PERFORMANCF; REL1TJ01'v'SHlP MARKF17NG: INTERNATJONJ"1L AIARKETlNG

~

School of MarketIng, UniverSity of New South W:llc~. UNSW Sydney. NSW 2052. Email: c.~tylcs«.. uns\\.edu.au London Bu~me~s School. Regent's Park, London NWl 4SA. UK. Ema;l: ,arnbJcrCa; london.celu

The author,. gratcfuliy acknowledge the AustralIan Trade Comnm,swll (Austrade) and the UK D:?partment 'Jf Trade and Industry for their as,lstance with thiS research.

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Copyright © 2001. All rights reserved.

[hc cmhc r 2000

L

Introduction 1t'5 all about linLDg in to form a proper working partnerslllr: selling Wiih the (ilstributm nelt to the distr;bt:wr (CK cxp,'rtcr q:.lUted Hi Department of Trade and I:idustry, 1997. p. 11)

esearch into export performance has so far mostly fa-.;uscd on factors rdating ttl the firm, marketing strategy and the market environment (e.g. Aaby & Sbtcr 1989; Madsen 1989; Cavusgil & Zau \994). Relational issues have nor featured prominently. Y ct in the US Department of Commerce's 091-\7) li.;,t of 12 reasons for export failure, the 5.econd and third are insufficient managerial ccl!nmitment to expons and insufficient care in "electing overseas distributors. Reports of practitioner experiences also support the importancc of distributor relationships (e.g. Department of Trade and Industry 1997; Aw;tralian FinanCial Rcvinl' 1997 i. \Vhlle suhstantial interest has been shown In domestic manufacturer/distributor relationships (e.g. Morgan & Hunt 1994), this emphasi~ ha~ only just started to he carried over to an international. and in particular. an expon context (e.g. Lee 1997; Leonidou & Kalc:ka 199xj. This paper seeks to fill this gap in the literature by empirically examining the impact of relalional variahks. such a:,. trust and relatiom.hip commitment. on export performance. The next two sections summarize and review the relevant export mCLrketing performance literature, as well alort::m ,mu Hmlt (1994) showed. the li10!"C tru~( iD the n:btlOn
The:,e

4. 41

hyp(lthese~

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ri hI © 2001. All ri hIs reserved.

Stv!t:, & Amb!er' REJA T/(iNAL VARJABf.ES ON EXPORT [,£'RfORMANCL

Figure 1 Conceptual Model of Export Performam'c Social learning and Commitment

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,t:::\

Performance

C{m1!nltmen~

i----.---I~_·_· ___ ·· ________________________ _

Htudy W;l, [he'D l'onduC[cd ;n which qu~""""Uonnairl"''''' \\ ere- :-.~~Jit UJ a "" . . tnlplc of 70 C\rortcr:-.~ Y1L'Ljint~ 2S u,,,,(l1:Jlc ljlH:''.li(}lUUl:n'" n(t~/( I. Thi" pilot dati was USl,d to verify rdiabilit~· and unldimcD\H1nallt:\, of thc' multi-ilull '-,cak~, anel In confIrm that [he pbnncd pnlL'cdurc (If rl'lTL\lt:ng hy tckphllnc, mallmg thl' quc () I iSO .lrc ,.lgmlIcant at the I' fI

< () fJI level

= 202

(nc AustralIan sample \ltalI\:~.) . .;orrclnuon U 122 ail' ~lgnrfl;::arl~ at th0 p < Ci 05 level, and

correlations> 0 ; (,·7 arc slgnlflCan! at the f!

{J

< 0 U1 icvc~

= 232

.~

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abOve the d:agonaL

l''lr tbe UK s:lIn"k'

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7

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Cclrrclatlons

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4.89

536

Note

--~~.--

5.f4

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C IntenSIty

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2

-

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.

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Copyright © 2001. All rights reserved.

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..,~

f.OI!

--~----.-

Ausn
:,ignificant, \",hile H 1. H2, and H4-H9 were all posinve and slgnificant.

6.

Discussion and Implications

6, j

Umltatiol1s

Before discussinf the Implications of tbe research, Jt~ limitations should be

relognised, First, although the sampling Itst used 'N,b con"idered the beed that the omission of relevant variable~ in the model may have led to a degree of bia~ in parameter estimates. DespIte these hm,itations, the results provide strong support for the impact of relational vanables on export performance. In particular, the important relational proeesse:'. involved in experiential data collection, learnmg and relationshIp formation, termed here social informatIon. have been highlighted. Interestingly. there wa~ no support for the link between objective data collection and market knowledge as it WitS measured In thl~ re~earch. To some extent this i~ consistent with Machen (1987; 19~9) who found little ~urport for a posltive link between 'market research' and export performance (although that hypothesis was not dIrectly tested here). It appears that knowledge, in the initial stages at least, is primarily bUllt using experiential data. The implications of this are discussed below. The data abo supported prevIOus findings on the impact of market commitment on performance. but with the inclu~lOn of the social learning variables. a more in-depth under~tanding of how market commitment develops, and its Impact on di~tributor relation~hips, has heen provided. Tbe ~tudy also proVIdes eVIdence for a link between relationship ccmmitment and export performance, although only in one of the datasets. The lack of support for this bypothesis in tbe Australian data set may reflect cultural differences. mostly prohably on the distnbutor SIde. For example, it generally takes longer to build cl()~e relationshIps in the Eastern culture,> (particularly for westerners) that dllminated the Australian sample, compared with the European cultures that made up tbe majority of the UK ~ample (Amhler & Styles 2000). This is supported by separate analysis of those venture~ that involved Asian distributors = 116) which yielded the same ~ubstantive result" a~ the total Australian sample analysls. This may have been compounded hy the fact that the Au~tralian exporters were ~ignificant1y Ics~ experienced in cxpl1fting and perhap;, had not lTloved t(l greater commitment ~tages. However. both datasets supported the developmental approach to exporteriLhstributor relationships, again providing insight into the proce~s by which such commitment develops. In doing so. thIS study confirm~ previous fmding~ in the domestic channels literature that link intensity variables to build ,md ,ustam commitment dlstrihution channels', Journal of Marketing Research, vol. 24, February, pp. 18-34.

III

Anderson. J.C ) 995, 'RelatlOnslllps m business market;,: Exchange epl,odes, value creatIon. and thelf empIrical assessment', jour'lai of the Academ} oj Markcting Sciclic!', vol. 23, no .:+,

Pl'. 347-·50. Anderson. J C. & Narus, 1984. 'A model of the dI«r;buwr's perspectlve of ck,tnbutorm~:nufacturer workmg relationshIp,'. icmmai of Madering, voL 48. Fall, pro 62-74. Anderson, J.e. & N:lru" J.A 1990, 'A model l'f manufacturcr and distributor workmg partnershIp,' , Journal of Market,Il/i, vol 54, Jan,lary, pp 201 -3 i Arndt, J. 1983, 'The polItIcal economy parad!gm F0uncbllC'1l for theory buildmg m m:irketmg·. Journal" ol Markeril1R, voL 47, FalL pp. 44-55 AustralIan Fmancial Review, 1997,

'JOInt

venture SWItches AdeiaJde fmy; on growth', Apnl 29,

p 31 Bagozzl, R.I'. 1975. 'Marketmg as exchange', loumal of Markctil1g, voL 39, Pl'. 32-9 Eago7Z], R.P 1994, 'Measurement m marketing research Basic prmcirlcs of questiorm:urc design', m Prine ipies of Markctlll,f! Research, cJ Rllfnrd P Bagozzl, BaSIl BlackwelL Cambndge, MA, P1' 1-49. B!lkcy. WJ 1978, 'An attempted mtegratwn of the hteraturc on the expl·rl hehaviour of firm·:. Jmima! of intematlOlwi Busincss Studws, vol 9, FalL PP 33-46. HIlkey, \VJ. 19S2. 'Vanables aSSOCIated WIth export profnabillty', Journal of [menzatiollaf Busin(ss Stwite..pcnentlal Data ColkctlOfI (f)

Market VISIts Dlstnbutor dlscasslOns RetaIler/wholesaler dlscus,lOns

5 pomtscale(emfol) 5 pomt !'cale (emfo2) 5-pomt scale (emf03)

New scale. based on Penrm,e (1960), exploratory research

ObJective Datd ColleclIon (f)

General published lOformatlOn Iv1arkct research

5 pomt scale (OInfo1) 5-romt ,cale (owfo21

N cw scule. b,lsed on Penrose (1()66). exploratory research

Export Markel Knl'wiedge (r)

Culture and customs Sclcral value, Gencrai way people lIve Users/cnnsamers of product DlstnhutlOn system Competltc'rs Langaage Coumryoverall

7- pomt ,cale (kn0w 1,

New scale, based OTi Johanson and Vahlnc (1977), exploratory research

Fxtcnt of re,oU[ce allocatIOn tc,

7- pOlr.l scale

Venture Bmmcss Performance (r)

FIrm s Market C)mmmnent (:)

venture

Management commltment to venture Extent llf formal planmng for venture Extent of re~()Url'f aliocatlon to cxportmg ReLltwn,hlp lntcn;'ity (f)

Trust (r)

Cu-e.pcration-lndex of 8 area~ of C'.)operdtlon jOint declslon-makmg--'-lI1dex of 13 areas of Joint JccI,wn-makrng Commutllc:atlOn-llldex ,)j frequency of 4 methods of l'ommllmca:lon + overaIllllteractlon score

'At tImes the dlstnbutor cannot he trusted' 'The dlstnhutor can he counted on to do what IS fight' 'The dlstnbulor has hIgh mtcgnty' Level of ovcrall trust m the relatJ0m.rnp

Rel.ltJ(lmhlp Cornnalment (I)

r

~

(cOtnlTIlt 1)

CavuspJ and Zou (J 994), Johanson and 7-p0ll1t scale (comllllt2) V"hlne (197 7 ) 7-point scale (cllmmJt3) 7 poml scale (comnllt4)

7-polnt :-.cak (coop) 7--pomt

s~ale

(jomt)

StandardIsed score (c"mmUTi)

7-pOint

~cale

\ trust 1)

7 pt'lllt sc;ule (trmt2)

Deserves ma'\lmllm effort to maintam

'7 -pomt scale (lllng3)

ret1ectlve measures: and

f = Lmnatlve measures.

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Copyright © 2001. All rights reserved.

Anderson and Naru~ (1984,1990). l\1orgar, and Hunt I 1994}

7-p01nt scale (trust3) 7 -pOInt scale (trust4) 7-pulnt scule (Jt~ngl) 7 -pOll1t scale dong2)

--_.------------

Morgan and Hunt Rosson and Ford (1982) ( j 994).

CommItment to relatlOTishlP IntcntlOTi to mallltam relationship mdefInItely

----_.-Note'

7. point scalc (know2) 7-roml scale (knov:3) 7-ru1nt sL'ale (know4) 7-pumt scale (knowS) 7-po1l11 sc"le (kne,w6) 7 [,om! scale (know7) 7-pomt scale (knuWI5)

c.!vusgli and Zou (1994)

Morgan anJ Hunt 119q 4)

Slyies & Ambler. RELATIONAL 1/4RIABLES ON EXPURT PERFORlvlANCE

Vo! 25,1VO 3

Appendix B Metric Equivalence Thl, eFA pro("cdur~ hm, been c).,tcndcd for usc In te~l1n!, sCdle, a~ros, cullures (Mullen I 'J9S; Slll/=h I YY5) This Involves ,eparate anal),,!s. hy ('"urnry, (,f a ('fA measurement model, It'llowed by a formal test of \vhether the parametel estImale, /'1 and 0, pn,duced for each country data set arc egllal Tim e;.tClh!lshes whethel or no: thc m"usures are culturally bound :Tnund1' I 9R2). Mullen (1 9'J5) and Smgh (1995) suggest that metnc (or comtruct) cljUlvaIclKc can he cstablIs!led In cr(1Ss·c ultural research by testIng thlee ,pec'lfle h:vp'lthcsc, HI

Pactonal slim/ann· there arc the samc number of factors (constructs) across natlOnal s3mplcs and the scale ltcms In,x! el!1 tu the ~ame factor~

H2

Faclonai