Resource dependency and institutional theory perspectives on direct and indirect export choices

Abstract

This article develops and tests resource dependency and institutional theory arguments to explain two choices facing SME owner/managers: (1) the decision whether to export or not and (2) if the firm exports, the choice between a direct (to customers abroad) and an indirect (using another firm as intermediary) export mode. Binomial logistic regressions on our sample of 871 Dutch SMEs suggest that institutional theory perspectives (owner/managers' perception of the increased international presence of their domestic competitors, customers' and suppliers' and perceptions of increased use of foreign suppliers) explain the decision to export, while resource dependency theory arguments (owner/managers' perception of the favorability of access to knowledge and technology, of production costs and of access to capital in the home market) guide the choice between direct and indirect export modes.

Board Competency Explanations for Differentiation in a Harmonisation Environment

“…We also notice that this model is explained by board size, while the only diversity measure which is significantly correlated by board size is the employee measure (untabulated). Our finding of a positive relationship between board size and information level is not consistent with findings in prior studies (e.g., Ahmed et al, 2006;Mak and Kusnadi, 2005), although it can be interpreted as consistent with predictions of resource dependency theory, i.e., the availability of necessary expertise for strategic decision making (Chen et al, 2009;Hessels and Terjesen, 2010).…”

“…In the all effects model, the board size is also a significant explanatory variable at the 0.1 percent level. The call for board diversity seems to be highly relevant for the corporate governance disclosure level, i.e., the amalgamation of these findings are consistent with predictions from the resource dependency perspective (Birkinshaw et al, 2001;Hessels and Terjesen, 2010;Lado et al, 1992;Lieberman and Montgomery, 1998).…”

“…Differences tend to materialise in two forms, namely: (1) differentiation from other companies by moving first and/or (2) differentiation from other companies by deciding on a higher level of corporate transparency or trustworthiness through governance structures. Differentiation behaviour is consistent with a resource-based perspective on competitive advantage as a driver for business strategy (Birkinshaw, Toulan and Arnold, 2001;Hessels and Terjesen, 2010;Lado, Boyd and Wright, 1992;Lieberman and Montgomery, 1998). Lado et al (1992) suggest a resource-based perspective as an alternative to the more deterministic view derived from neoclassical economic theory.…”

“…We contribute to existing knowledge about optimal board compositions by considering possible explanations for the ability and willingness to make certain critical corporate decisions. Related studies have focused on explanations for other corporate decisions such as whether and how to export (Hessels and Terjesen, 2010), product and/or geographic diversification (Chen, Dyball and Wright, 2009) and choice of human resource management strategy (Buck, Filatotchev, Demina and Wright, 2003). We undertake an explorative study of the corporate governance codes' general recommendations for board member competencies in order to identify potential explanations for differentiation decisions.…”

Dice Thrown From the Beginning?: An Empirical Investigation of Determinants of Firm Level Growth Expectations

“…Erramilli and D'Souza, 1993) and indirectly via intermediaries (e.g. Terjesen, O'Gorman and Acs, 2008;Hessels and Terjesen, 2009) and this trade is an important means by which the firm creates value, generates growth and accesses knowledge and technology (Hessels, 2008). while exporting is a risky strategy especially for start-ups and smaller businesses, we expect a positive relationship between export orientation and business growth.…”