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Export Assistance, Price Adaptation to the Foreign Market, and Annual Export Performance Improvement: A Structural Model Examination

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  • Montgomery, David B.

    (Stanford U)

  • Lages, Luis Filipe

    (Nova U, Lisbon)

Abstract

The increasing amount of export assistance provided to firms of rich and poor countries, shows the high priority given by national and international policy makers to the encouragement of international trade. Despite this, relatively few international business researchers have discussed the effectiveness of such export assistance. This paper provides an empirical foundation for simultaneously analyzing the effects of export assistance, together with management international experience/expertise and competition in the industry/commerce, on the decision to adapt or standardize the domestic pricing strategy to the main foreign market and ultimately improve a firm's annual export performance. Surprisingly, the findings reveal that the total effects of export assistance on export performance are non-significant because exporters use the support they receive to develop inaccurate pricing strategies (i.e. although support has a direct positive impact on performance, there is a negative indirect impact of support on performance through pricing strategy). These and other surprising results have important implications for both public policy and marketing management decision-making, and suggest several potentially fruitful streams of research.

Suggested Citation

  • Montgomery, David B. & Lages, Luis Filipe, 2001. "Export Assistance, Price Adaptation to the Foreign Market, and Annual Export Performance Improvement: A Structural Model Examination," Research Papers 1700, Stanford University, Graduate School of Business.
  • Handle: RePEc:ecl:stabus:1700
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    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP1700.pdf
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    References listed on IDEAS

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    4. Warren J Bilkey, 1982. "Variables Associated with Export Profitability," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 13(2), pages 39-55, June.
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    7. Reid, Stan, 1984. "Information acquisition and export entry decisions in small firms," Journal of Business Research, Elsevier, vol. 12(2), pages 141-157, June.
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    Cited by:

    1. Lages, Luis Filipe & Lages, Cristiana Raquel & Lages, Carmen, 2004. "The APEV Scale: A Measure of Annual Performance of an Export Venture," FEUNL Working Paper Series wp458, Universidade Nova de Lisboa, Faculdade de Economia.
    2. Lages, Luis Filipe & Leal, Ana Catarina, 2004. "Determinants of Expected Short-term Export Performance Improvement: An Empirical Study of Industrial Exporters," FEUNL Working Paper Series wp463, Universidade Nova de Lisboa, Faculdade de Economia.
    3. Wilkinson, Timothy & Brouthers, Lance Eliot, 2006. "Trade promotion and SME export performance," International Business Review, Elsevier, vol. 15(3), pages 233-252, June.
    4. Lages, Luis Filipe & Jap, Sandy D., 2002. "A contingency approach to marketing mix adaptation and performance in international marketing relationships," FEUNL Working Paper Series wp411, Universidade Nova de Lisboa, Faculdade de Economia.

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