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

Author

Listed:
  • 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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    References listed on IDEAS

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    Cited by:

    1. Luis Filipe Lages & Sandy D. Jap, 2002. "A contingency approach to marketing mix adaptation and performance in international marketing relationships," Nova SBE Working Paper Series wp411, Universidade Nova de Lisboa, Nova School of Business and Economics.
    2. Wilkinson, Timothy & Brouthers, Lance Eliot, 2006. "Trade promotion and SME export performance," International Business Review, Elsevier, vol. 15(3), pages 233-252, June.
    3. Luis Filipe Lages & Ana Catarina Leal, 2004. "Determinants of expected short-term export performance improvement: an empirical study of industrial exporters," Nova SBE Working Paper Series wp463, Universidade Nova de Lisboa, Nova School of Business and Economics.
    4. Luis Filipe Lages & Cristiana Raquel Lages & Carmen Lages, 2004. "The APEV scale: a measure of annual performance of an export venture," Nova SBE Working Paper Series wp458, Universidade Nova de Lisboa, Nova School of Business and Economics.

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