Sustaining Small Exporters’ Performance: Capturing Heterogeneous Effects of Government Export Assistance Programs on Global Value Chain Informedness

Abstract

The previous literature extensively highlighted the importance of export promotion programs (EPPs) provided by governments to enhance small- and medium-sized enterprises’ (SMEs) export performance. However, the literature still (1) lacks sufficient depth in analysing the way different types of EPPs sustain SME export performance and (2) suffers from the absence of an EPP portfolio that guides an efficient resource allocation for different EPP types. To fill these gaps, our study (1) developed a research model that integrates three different types of EPPs and (2) tested their indirect impacts on sustainable export performance via global value chain informedness, which is a largely ignored but indispensable capability in exporting. Using a partial least-squares equation model (PLS SEM) method to analyze 156 samples collected from 1st of October to 31st of December of 2018 by accessing Korean SMEs’ export managers, our model addresses the different roles of EPP types and also the part of the SME value chain informedness that acts as a critical enabler for sustaining export performance. Furthermore, by complementing the PLS SEM with an importance and performance analysis matrix (IPA matrix), we provide an action plan that guides an appropriate resource allocation to different types of EPPs. In theory, we provide an explanation for how different EPPs work for SMEs via the value chain informedness of SMEs for the export performance. We further capture such EPPs operating over the longer term, with a lasting export performance of SMEs so as to supply a sounder theoretical rationale for the EPP provision. The action plan delivers strategic implications for policy makers dealing with export-assistance programs operations. With the importance of global network involvement and communication with foreign partners, the incorporation of value chain informedness uncovers the necessity of interfirm network-focused informedness in international business literature.

Searching for a new perspective on institutional voids, networks and the internationalisation of SMEs in emerging economies: a systematic literature review

“…It had been applied to the investigation of the mainly institutional internal and external barriers to internationalization (Keen, 2013). In most cases, the studies had explored the interactions between those two general categories-e.g., by examining the moderating impact of any institutional voids on the role played by marketing capabilities of SMEs in export performance (Akbar et al, 2017), and by investigating institutions as providers of market knowledge (Han and Park, 2019).…”

Success Factors in the Internalisation of Export Companies in Colombia

“…Planned Export Assistance Programmes, provided to local exporting firms, allow them to exploit the market's full export potential [40]. Therefore, there are more options for achieving export success because firms are competent to obtain knowledge about markets, customers, regulatory agencies, local supplies, etc.…”

Impact of Logistics Capacity on Economic Sustainability of SMEs

“…In other words, the success of a small company is more dependent on the success of logistics as a driver of export activities. Han [16] supplemented these statements, with evidence of government support programs for small exporters, in the form of information on the resources and capacities of other exporting companies. There is clear space for analyzing whether exporting activities (as an external business factor) and ownership over logistics capacities (as an internal business factor) can drive business performances of an SME.…”