Export Intensity, Learning, and Performance: A Multidimensional Model for Export Strategy

Emerging economies have been focusing on enhancing exports by adopting relaxed trade policies and easing the institutional environment for firms to operate in. To assess the export performance of firms, export intensity (EI) is a measure that has been used widely. Across studies, a mixed and contradictory relationship has been seen between export intensity and firm-specific competencies. This study attempts to develop a model by dichotomizing export strategy between expansion-oriented and escape-oriented strategies, the first being motivated by a resource-based view and the second depending on a domestic institutional perspective. It extends recent research by proposing that exporting firms, depending on the strategy adopted, are influenced by learning from exporting, human capital, and the domestic institutional environment. In contrast to previous studies, this study finds that high export intensity does not always lead to advanced firm competencies. It is seen that high export intensity firms may export to escape the inefficiencies of the domestic environment and may not develop advanced firm competencies or focus on retaining human capital. While firms with low EI gain from learning by exporting, undertake expansionary activities in exporting, in turn develop advanced competencies, they incur high human capital costs. The present study helps to provide clarity and integrates the dichotomous export strategies with export intensity and their influence on firm-level competencies as well as institutional environments in emerging economies. The hypotheses formulated in the study are validated and supported by a sample of exporting firms from India.