Whilst there has been great interest in investigating the relationship between internationalization and export performance, less is known about what effect export performance has on internationalization (Annavarjula & Beldona, 2000; Glaum & Oesterle, 2007; Hennart, 2007). For the purpose of this study, it is assumed that the concepts of export performance and internationalization are closely related and,
further, that the internationalization process is affected by export perfonnance. In spite of considerable research on what impact internationalization has on export perfonnance, little research has been undertaken to investigate the opposite relationship.
The Aaby and Slater's model ( 1 989) is the leading framework to guide this research discipline. Their export perfonnance model draws on meta analysis of empirical studies between 1 978 and 1 988. Aaby and Slater's work identifies the factors that impact on export perfonnance in relationship to each other, and it is especially useful for the clear positioning of export barriers. According to their research, export barriers have a direct influence on export perfonnance (Aaby & Slater, 1 989). This fact that the barriers influence export perfonnance is now widely accepted (Aaby & Slater, 1 989; Cavusgil & Zou, 1 994; Leonidou, Katsikeas, & Samiee, 2002). The operationalization of export success, however, varies according to the theoretical framework adopted (Zhou & Stan, 1 998).
Aaby and Slater ( 1 989) establish a direct relationship between export barriers and export perfonnance and locate export barriers clearly between strategy and export perfonnance. Their model has been used extensively as a conceptual framework and guided numerous studies (Bell, Crick, & Young, 2004; Chetty, 1 993 ; Kaleka, 2002; Lu & Beamish, 200 1 ). Aaby and Slater ( 1 989) propose differentiating between internal and external environmental influences which impact on export perfonnance. Internal factors concerning competencies include matters such as technology, export and market knowledge, planning, export policy, management control, quality, and
communication. Finn size, management commitment, management perceptions
towards financial incentives, competition, market potential, distribution, risk and profit, relate to the finn's characteristics, and, according to Aaby and Slater ( 1 989), it is the finn's competencies and characteristics that detennine export perfonnance. The researchers further distinguish strategy through market selection, use of intennediaries, product mix, product development, promotion, pricing, and staffing. Competencies and strategy impact either directly or indirectly on export perfonnance. Export barriers are directly influenced by strategy, which in turn is influenced by competencies and finn characteristics. All the above factors drive export perfonnance
and the ability to internationalize business. What their model (Aaby & Slater, 1 989) does not explain, however, is the relationship between environment and strategy.
The more recent export performance models reviewing current empirical research are mainly based on Aaby and Slater's earlier work (Aaby & Slater, 1 989; Chetty & Hamilton, 1 993 ; Gemuenden, 1 99 1 ; Madsen, 1 987; Zhou & Stan, 1 998).
Chetty and Hamilton ( 1 993) put forward a model of inter-related factors impacting on
export performance. Their model includes competencies, firm characteristics,
economic environment, commercial environment, and export strategy as the determining factors on export performance. In contrast to Aaby and Slater ( 1 989), Chetty and Hamilton's ( 1 993) model does not show the economic and commercial environment to have any impact on export strategy.
Zhou and Stan ( 1 998) differentiate the determining factors of export performance into controllable and uncontrollable, as well as internal and external. Developed ten years after the seminal model by Aaby and Slater ( 1 989), their work is based on a review of internationalization literature between 1 987 and 1 997.
Leonidou Katsikeas, and Samiee (2002) reviewed recent empirical literature and provide an advanced export performance model based also on meta-analysis. They classify the critical factors into three groups: ( 1 ) managerial characteristics, (2)
organisational factors, and (3) environmental forces. Their model considers
environmental forces to influence both, the export target and export strategy. This is a major difference to Aaby and Slater ( 1 989) who do not show environmental influences impacting on performance; Leonidou et al. (2002) take them into account. Leonidou et al. separate strategic factors into two distinct groups: export targeting (market selection and market segmentation) and export marketing strategy (product, pricing, distribution and promotion). An added and useful point in their suggestion is that export performance can be separated into economic and non-economic aspects. The model, however, does not clearly locate export barriers that might be part of, or
impact on, every one of the above factors. Additionally, networks are not
distinguished as a separate factor. Possibly, networks are considered part of
direct influence and therefore do not belong directly to organisational factors. The main criticism in regard to their model, however, has been that of a "unidirectional causal relationship" (Leonidou, Katsikeas, & Samiee, 2002, p. 52). Critics have suggested that the model lacks the feedback element concerning learning and experience, and also fails to incorporate an increase in resources through profits from the successful export venture. Thus, the model appears to be rather static and not dynamic.
Morgan, Kaleka and Katsikeas (2004) developed a further model by differentiating the major impacting factors into two separate groups: available capabilities and available resources (in both cases relating to exporting). They argued that capabilities and resources determine both equally the choice of competitive strategy concerning the export venture. The strategy, consequently, decides on the positional advantage in the export market. They argue that the positional advantage will determine export
performance. Finally, they introduce a third variable which they identify as
"competitive intensity of the export market". This factor is lying outside the control of the firm and impacts independently on the relationship of strategy to positional advantage. Morgan Kaleka and Katsikeas (2004) further suggest that competitive intensity has influence on both, positional advantage and export performance. They acknowledge that this last assumption has not yet been tested by research and has to be treated as a potential relationship.
The major advance of this latest model is the introduction of a feedback loop from export performance to the firm's capabilities and resources through investment and learning (N. A. Morgan et aI., 2004). The feedback loop addresses the issues of dynamism but the model fails to show the impact that the competitive intensity of the export market has on strategy formulation. Environmental factors also seem under acknowledged in the strategy consideration of this model and a limitation of the model might be its restriction to the manufacturing sector.
Good progress has been made towards conceptualisation of factors associated with export performance. Since the Aaby and Slater framework in 1 989, subsequent models have been developed and are now available for discussion. However, all of these models still have some limitations when it comes to a full explanation of the
major observed phenomena. There is agreement in the literature on some of the underlying reasons for this lack of integrative framework acknowledging three particular problems that tend to limit further progress.
Firstly, researchers draw on a wide range of divergent theoretical perspectives (Aaby & Slater, 1 989; N. A. Morgan et aI., 2004; Zhou & Stan, 1 998) which makes the integration of findings from different studies difficult.
Secondly, there are extensive differences of how the primary units of analysis are selected and these units can range from export venture to firm characteristics (C.S. Katsikeas et aI., 2000; Madsen, 1 987). These practices can make it difficult to isolate the critical factors when using quantitative methodological techniques.
Thirdly, export performance is multi-dimensional, so export performance has economic and strategic components which are difficult to quantify (Thach & Axinn, 1 994). Therefore, so far no single model has been able to explain and integrate existing knowledge in regard to export performance and internationalization.
Fourthly, and most importantly, none of the most recent export performance models focuses on export barriers as one of the critical factors for success. While there is no doubt that export barriers have direct impact on export performance since Aaby & Slater ( 1 989) developed their model this factor has been left out of recent research into export performance. At the same time investigations into export barriers have progressed considerably which will be discussed later in this chapter. However, the relationship of export barriers to export performance has escaped the attention of recent research and both themes have led somewhat separate lives. Thus, here appears a gap in the literature which warrants further research. A performance model which is developed from the perspective of export barriers might provide insights into
the successful management of export barriers. Additionally, it might provide
explanations on how and why businesses which are in similar circumstances and facing the same barriers differ in export performance. At the same time, research that seeks to develop a performance model which integrates both, the negative factors and the positive factors influencing export performance should offer a better understanding of how and why businesses internationalize. Ultimately, a framework
pulling together export barriers and export perfonnance will result in a clearer picture of what factors are necessary for success, when they are needed and what public policy implications should be considered resulting from them.
In the next part of this chapter the major factors that have been commonly identified as influencing export perfonnance are presented. The section commences with the "human" factor, arguably the most critical factor for export perfonnance. The export manager, or more generally, the person carrying out the decision to internationalize, greatly influences export perfonnance and the internationalization process.