Firm export strategies and firm export performance in the United States wine industry: A longitudinal study
Firm behavior in export market strategies and firm export performance were examined in the U.S. wine industry using longitudinal data on export transactions taken from the PIERS (Port Import/Export Reporting Service) Foodstuff Data Library from 1983 to 1991. A set of naive decision rules was created for counting the number of export markets where firms entered, remained, or reentered (after exiting) over time. The degree of geographic diversification achieved in firm exports was measured. These dynamic measures of firm export market strategies, along with measures of firm age and firm size, were used to estimate firm export intensity and firm export growth over time.
Relationships among these measures of firm characteristics, firm export strategies, and firm export performance were explored. Hypotheses as to direction of the relationships were developed based on an extensive literature review. Simple tests of correlation were used to test the hypotheses. Results supported 20 of the 21 hypotheses developed.
Three models of export performance were proposed and tested using path analysis and structural equation modeling. These models included a variant of the strategic model of export performance proposed by Aaby and Slater (1989). Firm export strategies were found to be better at explaining firm export performance than were firm characteristics. Geographic diversification market, entry, and continued market presence explained 42% of the variance in firm export intensity, while market entry, continued market presence, and market reentry explained only 13% of the variance in firm export growth. The strategic model proposed was not appreciably better in explaining variance in firm export performance versus the model using export strategies alone. Firm size and firm age also explained very little of the variance in firm export market strategies in the strategic model.
The results suggest support for the roles of country mobility and of exporting as a path of least resistance for small firm growth (Bonaccorsi, 1992), but not for Calof's (1994) contention that smaller firms only export once an economic downturn is experienced in their large domestic market. Implications are discussed for government export promotion administrators and for researchers in the areas of export behavior, market entry modes, and theories of the internationalization and growth of the firm, including small or medium-sized enterprises (SME).