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Vol3 Iss1!53!70 Impact of International Market Entr
Vol3 Iss1!53!70 Impact of International Market Entr
1 (2011) 53-70
The Journal of
Mathematics and Computer Science
Available online at
http://www.TJMCS.com
The Journal of Mathematics and Computer Science Vol .3 No.1 (2011) 53-70
bAssistant
cMaster
Abstract:
With increasing levels of globalization and international competition, managers are facing
ever more complex strategic decisions. Often, foremost among these are decisions relating
to the choice of entry strategy in export markets. Selection of an appropriate entry strategy
is a critical and indispensable component of the strategic decision a firm has to make when
investing overseas. The present study has been implemented with the aim of examining the
impact of entry strategy on export performance of Iranian export companies. In goals and
nature of research, it is based on a Descriptive Study, and in collecting data, it is on the
basis of a Survey Research. Its statistical population consists of active export companies in
stock market. Based on the method of judgmental, non-probable sampling (experts
choice), we chose 75 companies which cover 90 per cent of non-petroleum exports of the
country as case study.
We collected the essential data through questionnaires. To analyze the data we used
statistical methods of analyzing variance and regression of multi-variables. The study
1
53
60
Direct export
Entry Strategies
Export performance
Strategic
alliances
Foreign direct
investment
Control Variables:
International Experience
Firm Size
Research Methodology
Based on nature and goals, this research is Descriptive. This is categorized in Descriptive
format because Descriptive Research studies present condition and explains the results;
moreover, the researcher cannot change any independent variables, but he can use the
results to suggest, design a model, or design a system (Khaki, 2000). The current research
is a Survey one in the method of data collection. The statistical population of the research is
the Iranian export companies active in stock market which were present in foreign markets
between 2006 and 2010. The statistical sample of the research consists of Iranian export
companies active in stock market which were present in foreign markets between 2006
and 2010 and their export performance was not less than $1 million. Based on judgmental,
non-probability sampling method (experts choice), 75 companies were chosen as final
statistical sample which covered 95% of the country non-petroleum export. Because 14
companies either did not want to cooperate in research or their questionnaires were
incomplete, the analysis was conducted on 61 companies which covered more than 82% of
the total export of the Iranian country.
Questionnaire Validity and reliability
In this research, to evaluate the validity of the designed questionnaire, a copy was given to
some management professors who were familiar with international marketing and export
issues to express their ideas about the accuracy and clearness of the questions. After
necessary amendments, they approved the validity of the questionnaire. For determining
questionnaire reliability, we used Cronbach Alpha. The total sum of the calculated Alpha is
0.919 which shows the high reliability of the designed questionnaire.
Descriptive Analysis
In each statistical analysis, the first step is to manifest and summarize the data. Table 1
describes the research pattern.
61
Percent
21.31
60.65
18.02
45.9
44.26
9.83
34.42
65.57
4.91
55.73
39.34
Inferential Analysis
To determine the impact of entry strategy on export performance by considering covariate
variables of international experience and firm size, the analysis of variance is used. It is the
method that analyzes the simple and interactive impacts of two or more independent
variables on one dependent variable. In other words, in this analysis one or more
independent, semi-independent or interactive variables change to create deviation of
dependent variable. In this design, the number of ways, values, or issues that an item
changes by is called its levels (Hooman, 2008: 488). The levels of entry strategy factor
based on the degree of involvement in international markets are very high, high, low and
very low. The following statistical hypotheses were made to assess the entry strategy in
export performance:
Zero Hypotheses: The average of export performance of companies with different entry
strategies is the same.
Alternative Hypothesis: The average of export performance of companies with different
entry strategies is different.
Table 2 illustrates the assessment results of the effects of entry strategy on export
performance. It shows descriptive statistics and the table of assessment of effects in midtests (model test).
Table 2- Descriptive Statistics of Entry Strategy Variable
Entry Strategies
Number of
(Based on
Average
Std. Deviation
Companies
International Markets
involvement)
Very low
31.7375
21.6523
16
(Indirect Export)
low (Direct Export)
45.4965
34.29192
26
high (Alliances)
15.7643
13.97142
7
62
21
Based on the table 1, the average of export performance for the companies which use
indirect export entry strategy is $31.73 million. For those which use direct export entry
strategy it is $45.49 million. For those which use strategic alliances entry strategy it is
$15.76 million and for those which use direct investment entry strategy it is $86.95 million.
This analysis depicts the difference in export performance of companies based on their
entry strategy.
Tests of Between-Subjects Effects (Model Test)
Tests of Between-Subjects Effects (Model Test) have indicated in table 3.
Table3. Tests of Between-Subjects Effects (Model Test)
Dependent variable: export performance
Source
Type III Sum of
df
Mean
F
Squares
Square
Corrected Model
24178.634(a)
4
9792.158
14.231
Intercept
42553.169
1
3353.669
13.1581
International
13.388
1
17.320
0.597
experience
firm size
3181.377
1
4701.651
15.603
Entry strategy
16493.482
2
5021.991
14.579
Error
25888.239
32
652.757
Total
88129.655
61
Corrected Model
86171.15
60
a R Squared = .562 (Adjusted R Squared = .531)
Sig.
.000
.008
.003
.001
.000
The results of table 3 are the most important for interpreting of factorial variance analysis.
This test shows the significance or non-significance of total model and also the separate
effect of each independent variable on dependent one. Table 3 can be described as follows:
1- As the significant level of the corrected model and the width from the source are less
than 0.05, the model is significant.
2- The effect of International experience variable (with statistic F=0.597 and
significance level of .003) on export performance is significant. That means,
statistically, export performance is different in different levels of international
experience. That is international experience affects export performance.
3- The effect of firm size variable (with statistic of F=12.203 and significance level of
0.001) on export performance is significant. That means, statistically, export
performance in different levels of firm size is not the same. That is firm size affects
export performance.
4- The main effect of entry strategy variable (with statistic of F=15.603 and
significance level of 0.501) on export performance is significant. That means,
statistically, export performance varies in different entry strategies and is not the
63
0/05
Indirect export
0/12
0/015
Direct export
0/15
0/29
0/32
0/07
Strategic alliances
Export performance
0/37
0/19
Foreign direct
investment
0/35
0/11
0/65
0/15
0/31
0/21
Firm size
References:
1. Albaum Gerald et al, (2002), International Marketing and Export Management,
Prentice Hall, pp.248-249
2. Andersen, O. (1997), Internationalization and Market Entry Mode: A Review of
Theories and Conceptual Frameworks, Management International Business Studies,
Vol.17, No.2, pp.126.
3. Andersen O. and Buvik A. (2002). Firms internationalization and alternative
approaches to the international customer/market selection. International Business
Review. Vol. 11 pp. 347363
4. Arregle, J.-L., Hbert, L., Beamish, P., (2006).Mode of international entry: the
advantages ofmultilevelmethods. Management International Review. Vol. 46 No.5 Pp.
597618
5. Brouthers, K., (2002). Institutional, cultural and transaction cost influences on
entrymode choice and performance. Journal of International Business Studies. Vol. 33
No.2 pp. 203221
6. Brouthers, K., Hennart, J.-F., (2007). Boundaries of the firm: insights from
international entry mode research. Journal of Management. Vol.33, No.3. pp. 395
425.
7. Buckley, P. and Casson, M. (1976), The Future of the Multinational Enterprise.
London: Macmillan.
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