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Behind make or buy decisions in export strategy: A replication and extension of Trabold

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  • Peng, Mike W.
  • Zhou, Yuanyuan
  • York, Anne S.

Abstract

Given the centrality of make or buy decisions in transaction cost theory, it is important to understand the factors that influence managers' choices. The empirical evidence to date is unclear as to what conditions influence export managers' choices to "make" (the direct mode of establishing in-house export channels) versus "buy" (the indirect mode of outsourcing certain services to intermediaries). Peng and Ilinitch [Peng, M. W., & Ilinitch, A. Y. (1998). Export intermediary firms: A note on export development research. Journal of International Business Studies, 29(3): 609-620] propose a transaction cost-based theory of export intermediation. They suggest that market distance and product complexity are the two primary driving forces behind exporters' decision to "buy" by engaging export intermediary firms. Their hypotheses have been tested and partially supported by Trabold [Trabold, H. (2002). Export intermediation: An empirical test of Peng and Ilinitch. Journal of International Business Studies, 33(2): 327-344] based on French data. Using a new archival database covering 185,731 export transactions over a two-year period, we replicated Trabold's work using U.S. firm data. Our findings are similar. This strengthens the reliability and validity of Peng and Ilinitch's theory as well as the generalizability of Trabold's findings to a more global context. Overall, given both the importance and paucity of replication work in the strategy literature, this study serves as an example of how export strategy research can advance through cumulative empirical efforts.

Suggested Citation

  • Peng, Mike W. & Zhou, Yuanyuan & York, Anne S., 2006. "Behind make or buy decisions in export strategy: A replication and extension of Trabold," Journal of World Business, Elsevier, vol. 41(3), pages 289-300, September.
  • Handle: RePEc:eee:worbus:v:41:y:2006:i:3:p:289-300
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    References listed on IDEAS

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    1. Roehl, Thomas, 1983. "A Transactions Cost Approach to International Trading Structures : The Case of the Japanese General Trading Companies," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 24(2), pages 119-135, December.
    2. Mike W Peng & Anne Y Ilinitch, 1998. "Export Intermediary Firms: A Note on Export Development Research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(3), pages 609-620, September.
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    Cited by:

    1. Ho-Fuk Lau, 2008. "Export channel structure in a newly industrialized economy," Asia Pacific Journal of Management, Springer, vol. 25(2), pages 317-333, June.
    2. Boehe, Dirk Michael, 2014. "Strategic hedging: Evidence from Brazilian exporters," Journal of World Business, Elsevier, vol. 49(3), pages 290-300.
    3. Shun-Jen Hsueh & Hsin-Hong Kang, 2007. "Cointegration relationships of strategy variables among firms within strategic groups," Asia Pacific Journal of Management, Springer, vol. 24(1), pages 61-73, March.
    4. Zhongfeng Su & En Xie & Yuan Li, 2009. "Organizational slack and firm performance during institutional transitions," Asia Pacific Journal of Management, Springer, vol. 26(1), pages 75-91, March.
    5. George O. White & Orhun Guldiken & Thomas A. Hemphill & Wu He & Mehdi Sharifi Khoobdeh, 2016. "Trends in International Strategic Management Research From 2000 to 2013: Text Mining and Bibliometric Analyses," Management International Review, Springer, vol. 56(1), pages 35-65, February.
    6. Li, Min & He, Xinming & Sousa, Carlos M.P., 2017. "A review of the empirical research on export channel selection between 1979 and 2015," International Business Review, Elsevier, vol. 26(2), pages 303-323.
    7. Peng, Mike W. & Lee, Seung-Hyun & Hong, Sungjin J., 2014. "Entrepreneurs as intermediaries," Journal of World Business, Elsevier, vol. 49(1), pages 21-31.
    8. Li, Peng-Yu & Meyer, Klaus E., 2009. "Contextualizing experience effects in international business: A study of ownership strategies," Journal of World Business, Elsevier, vol. 44(4), pages 370-382, October.
    9. Gang Wang & Xu Jiang & Chang-Hong Yuan & Ya-Qun Yi, 2013. "Managerial ties and firm performance in an emerging economy: Tests of the mediating and moderating effects," Asia Pacific Journal of Management, Springer, vol. 30(2), pages 537-559, June.

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