The Relationship among Export Assistance, Pricing Strategy Adaptation to the Foreign Market, and Performance Improvement

• Main Authors: Lages, Luis Filipe, Montgomery, David B.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2004
• Subjects: International Business; Sales and Merchandising
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/2332; https://ink.library.smu.edu.sg/context/lkcsb_research/article/3331/viewcontent/090704.pdf
• Institution: Singapore Management University

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 marketing researchers have discussed the effectiveness of such export assistance. This exploratory study provides an empirical foundation for simultaneously analyzing the effects of export assistance on the decision to adapt or standardize the domestic pricing strategy to the main foreign market and ultimately improve a firm’s short-term export performance. Surprisingly, the findings reveal that the total effects of export assistance on short-term export performance are non-significant because although export assistance has a direct positive impact on performance, there is a negative indirect impact on performance through export pricing strategy adaptation. Findings also indicate that both export assistance and performance improve with management international experience and with the degree of export market competition. These and other surprising results have important implications for both public policy and management decision-making, and suggest several potentially fruitful streams of research.