Volume 20 Number 5 2003

ISBN 0-86176-880-9

ISSN 0265-1335

International Marketing
International marketing in the Asia-Pacific region
Guest Editors: Paul Chao, Saeed Samiee and Leslie Sai-Chung Yip


International Marketing Review
International marketing in the Asia-Pacific region Guest Editors Paul Chao, Saeed Samiee and Leslie Sai-ChungYip

ISSN 0265-1335 Volume 20 Number 5 2003

Access this journal online __________________________ 467 Editorial advisory board ___________________________ 468 Abstracts and keywords ___________________________ 469 French abstracts___________________________________ 471 Spanish abstracts __________________________________ 474 Japanese abstracts_________________________________ 477 International marketing and the Asia-Pacific Region: developments, opportunities, and research issues
Paul Chao, Saeed Samiee and Leslie Sai-Chung Yip ___________________



Export market-oriented behavior and export performance: the moderating roles of competitive intensity and technological turbulence
John W. Cadogan, Charles C. Cui and Erik Kwok Yeung Li _____________


The relationship between strategic type and firm capabilities in Chinese firms
C. Anthony Di Benedetto and Michael Song __________________________


Access this journal electronically
The current and past volumes of this journal are available at

You can access over 100 additional Emerald journals, each with a comprehensive searchable archive of articles (many dating back to 1989), a detailed classification system and links to referenced material. See page following contents for full details of what your access includes.


A cross-cultural comparison of Internet buying behavior: effects of Internet usage, perceived risks, and innovativeness
Cheol Park and Jong-Kun Jun _____________________________________


The effect of FDI inflows and ICT infrastructure on exporting in ASEAN/AFTA countries: a comparison with other regional blocs in emerging markets
Taewon Suh and Omar J. Khan ___________________________________


Awards for Excellence _____________________________ 572

Research Register Located at www.com Key features of Emerald electronic journals Online Publishing and Archiving You can gain access to past volumes as well as new material from this journal on the Internet via Emerald Fulltext. E-mail an Article This facility allows you to e-mail relevant and interesting articles in PDF format to another PC for later use.emeraldinsight. meetings or seminars. These are selected to provide readers with current awareness of interesting articles from other publications within the same field.minerva.emeraldinsight. For further information about what is available visit www. You can browse or search the database for relevant articles. It provides article reviews from the world’s top management journals.hanshuber. subject-specific database brought to you by Emerald Management Reviews. contact: E-mail support@emeraldinsight.com Huber E-Journals e-journals. simple system that needs only minimum administration.oclc. This feature is invaluable if you are seeking information or wish to disseminate information about your own research.com/register Once completed. Registration is simple and full instructions are available online at www. training courses.com or via the journal homepage www. reference or printing purposes.com/ft – is the recommended means of electronic access. The database is updated monthly and gives users details of how to obtain the full text of original articles.com/english/index.htm As a subscriber to this journal. Emerald Customer Support Services For customer service and technical help.htm Our liberal institution-wide licence allows everyone within your institution to access your journal electronically. thus making your subscription more cost-effective.emeraldinsight.com/copyright How to access this journal electronically To benefit from electronic access to this journal you first need to register on the Internet. electronic access to the content of this title. Choice of Access Electronic access to this journal is available via a number of channels.emeraldinsight.org/firstsearch/ SilverLinker www. Your access includes a variety of features that increase the value of your journal subscription.www.emeraldinsight.silverplatter. Emerald WIRE (World Independent Reviews) Emerald WIRE is a fully searchable. your institution will have instant access to the journal content from www. Key Reading This feature provides abstracts of articles chosen by the journal editor on the basis of their subject-matter.com Tel +44 (0) 1274 785278 Fax +44 (0) 1274 785204 Additional Complementary Services Available Your access includes a variety of features that add to the functionality and value of your journal subscription: E-mail Services Emerald’s range of free e-mail alerting services is designed to deliver personal notification of news and features in a number of different interest areas.htm Minerva www. as it provides fully searchable and high value-added access to the complete content of the journal. Access is available via IP authentication or username and password. Our Web site has been designed to provide you with a comprehensive.at OCLC Firstsearch Electronic Collections Online www. the Emerald Research Register is an Internet research forum where you and your readers can identify information on research activity world-wide.com Swets Blackwell’s SwetsWise www.com/imr.emeraldinsight.swetswise. . enabling end users and libraries to reach the content through their preferred delivery system.com/imr. Support Resources Comprehensive librarian and user toolkits have been created to help you get the most from your journal subscription. The Emerald Fulltext Web site – www. you can benefit from instant. This only applies to articles of which Emerald owns copyright. For further details visit www. Reference Linking Direct links are provided from the journal article references to abstracts of the most influential articles cited (where possible this is to the full text of the article).com/usertoolkit Automatic permission to make up to 25 copies of individual articles This facility can be used for teaching purposes.ebsco.com/researchregister.emeraldinsight.emeraldinsight. Subscribers can also access and search the article content of this journal through the following journal delivery services: EBSCOhost Electronic Journals Service (EJS) ejournals.

Poland Professor Nigel J. UK Professor K. Haley University of New Haven. UK Dr P. Burnaby. 5. University of London. UK Professor James E.N. USA Professor Ilkka Ronkainen Georgetown University. UK Sam Okoroafo University of Toledo. Cyprus Professor Dale Littler UMIST.IMR 20. Wills Jr University of Hawaii. Austria Dr Helen Perks UMIST. Williamson Liverpool John Moores University. Canada Professor George T. USA Professor Stan Paliwoda University of Birmingham. Kaynak Pennsylvania State University. 2003 p. Rajendran The University of Northern Iowa. Denmark Professor Constantine S.P. USA Dr Irvine Clark III James Madison University. UK Dr Roger Bennett London Guildhall University. Norfolk. USA Dr Vivienne Shaw University of Otago. UK Professor Paul Chao University of Northern Iowa. USA Dr Marylyn Carrigan University of Birmingham. UK Professor Michael J. USA Professor Saeed Samiee University of Tulsa. 20 No. Pennsylvania. Schlegelmilch Wirtschaftsuniversitat.M. BC. Rao Kuwait University.5 EDITORIAL ADVISORY BOARD David Ballantyne Melbourne Business School. UK EDITORIAL REVIEW PANEL Dr Jim Bell Magee College. USA Professor E. Kuwait Professor Ronald Savitt University of Vermont. 468 # MCB UP Limited 0265-1335 . USA Professor Leonidas Leonidou University of Cyprus. Austria ¨ Professor Vern Terpstra University of Michigan. Sivakumar Lehigh University. USA Dr John B. USA Dr Chris Styles University of New South Wales. Thomas University of Strathclyde. University of Ulster. New Zealand Dr K. Boddewyn The City University of New York. Australia Dr Isabelle Szmigin University of Birmingham. Ford Old Dominion University. Maronick Towson State University. USA Professor Bodo B. UK Professor Thomas J. Australia Professor Jean J. USA 468 Professor Tevfic Dalgic University of Texas at Dallas. USA Professor Hans Muhlbacher University of Innsbruck. UK International Marketing Review Vol. UK Professor C. Sweden Professor Krzysztof Fonfara Wielkopolska Business School. USA Dr June Francis Simon Fraser University. USA Professor Sandra Vandermerwe Imperial College. Holden Copenhagen Business School. Katsikeas University of Wales. UK Professor Manucher Farhang Lulea University of Technology. Wien. USA Professor Adamantios Diamantopoulos Loughborough University Business School.

5. In examining the topic. under conditions of low environmental turbulence. Charles C. International marketing research considerations pertaining to the Asia-Pacific Region are explored in each section. was generally positive and strong. However. International marketing This study is motivated by the theme of this special issue of International Marketing Review. Electronic commerce. the emergence of Asian multinational companies. and Chinese enterprise managers become more responsible for their own strategic decision making. certain capabilities will be more important to certain strategic types. that is. the propositions using a data set of 245 Chinese firms. and research issues Paul Chao. the importance of relationships and networks for firms in this region. a clear understanding of the enterprise’s specific capabilities and advantages is required in order to achieve sustained competitive advantage. the costs of developing and implementing high levels of export market-oriented behavior may outweigh the benefits accrued. the penetration and influence of the Internet and electronic commerce in the region. Company performance. As the central government takes on a lesser role in the management of enterprises. Understanding the Chinese business environment is of importance to businesses around the world as the Chinese economy undergoes rapid expansion and decentralization of strategic decision making to the level of the state-owned enterprise. our findings suggest that export market-oriented behaviors are important The relationship between strategic type and firm capabilities in Chinese firms C. comprised mostly of state-owned enterprises. Concludes by discussing managerial implications. the development of Asian brands. Saeed Samiee and Leslie Sai-Chung Yip Keywords Asia-Pacific. 20 No. Behaviour. The success of firms situated in these nations has been even more pronounced since the 1990. proposes that prospectors have greater relative inside-out capabilities and information technology capabilities. and finds support for.International marketing and the Asia-Pacific Region: developments. Hong Kong This study examines the issue of how export market-oriented behaviors influence export success. Specifically. opportunities. China. predictors of several dimensions of export performance. Using survey data obtained from Hong Kong based manufacturing exporters. highlights a number of important developments including technological innovations. Decision making Proposes that firms of different Miles and Snow strategic types will have different bundles of firm-level capabilities. Empirically tests. Multinational companies. and research issues that warrant closer attention. Strategic management. opportunities. International Marketing Review Vol. The export market-oriented behavior – export performance relationship for these firms. which highlights the enormous economic success of Asia-Pacific nations and their emergence as global marketers of the twenty-first century. Cadogan. 2003 Abstracts and keywords q MCB UP Limited 0265-1335 . Abstracts and keywords 469 Export market-oriented behavior and export performance: the moderating roles of competitive intensity and technological turbulence John W. Anthony Di Benedetto and Michael Song Keywords Strategic choices. while defenders have greater relative outside-in capabilities and marketing capabilities. and their greater international integration and cooperation with the rest of the world. In particular. it appears that this behavior is most important for exporters operating under conditions of high environmental turbulence. Environmental regulations. as well as in the conclusions. Cui and Erik Kwok Yeung Li Keywords Export markets. This study highlights international marketing developments. Brands.

Online catalogues This research attempted to examine differences in Internet usage. and Internet buying behaviors between Korea and America. The effect of FDI inflows and ICT infrastructure on exporting in ASEAN/AFTA countries: a comparison with other regional blocs in emerging markets Taewon Suh and Omar J. noting that variations are typically present between individual countries.5 470 A cross-cultural comparison of Internet buying behavior: effects of Internet usage. Perceived risks.IMR 20. Khan Keywords Foreign exchange options. and to identify a model for factors influencing Internet buying behavior. perceived risks. Nonetheless. and innovativeness Cheol Park and Jong-Kun Jun Keywords Internet marketing. perceived risks of Internet buying. The analyses are based on data from a cross section of countries (26 emerging markets from three trade blocs) over time (from 1995 to 2000). The results show that the increase of investments in ICT infrastructure yields positive and significant returns in the national exporting level only for the ASEAN/AFTA and CEFTA sample. perceived risks. research concerned with the determinants of national exporting level should be conducted independently. United States of America. along with regional and national characteristics. The implications of the study are discussed and further research suggested. and cultural differences in effects of Internet usage and perceived risks on Internet buying behavior were found. . and innovativeness on a cross-cultural basis. analyzing a regression model of factors influencing Internet buying behavior. Overall. Results showed that there were significant differences in Internet usage and the perceived risks of Internet shopping. These results are discussed in the light of the different economic experiences of these trade blocs. but no significant differences in Internet buying intentions or online buying experience between Korean and American consumers. these effects were weaker or even opposite to those related to Korean samples. Export markets. While there were main effects of Internet usage and perceived risk on Internet buying behavior. explained by Internet usage. Globalization This paper explores the impact of both the increase in foreign direct investment inflows and the increase in information and communication technology infrastructure investments on exporting in ASEAN nations (the trade bloc of which is known as AFTA) compared with two other major trade blocs: CEFTA and LAIA. reflecting the results from this study. the impact of the increase of FDI inflows on export is significant only in the CEFTA and LAIA samples. Interestingly. Republic of South Korea. Innovation. Internet innovativeness.

Le succes des entreprises etablies dans ces nations est de plus en plus ` ´ prononce depuis les annees 1990. selon Miles et Snow.French abstracts ´ ´ Mercatique Internationale et la Region d’Asie Pacifique: developpements. il y avait. Chine. qui ont trait a la region d’Asie Pacifique. D’une ´ maniere generale. Hong Kong ` L’etude que voici examine la question de savoir comment les comportements d’exportation ´ orientes vers le marche influencent le succes des exportations. ainsi que dans nos conclusions. ´ possibilites et questions de recherche Paul Chao. Il semble surtout que ce comportement soit le plus important pour ` les exportateurs fonctionnant dans des conditions de haute turbulence ecologique. auront differents lots de capacites au niveau de la firme. la penetration et ´ ´ ´ l’influence de l’Internet et du commerce electronique dans la region. un rapport positif et puissant entre le ` ´ ´ comportement d’exportation oriente vers le marche et la performance a l’exportation. c’est´ ´ ´ French abstracts 471 International Marketing Review Vol. En examinant le sujet. notamment les innovations technologiques. les couts representes par le ´ ˆ ´ ´ developpement et la mise en pratique de niveaux eleves de comportement d’exportation oriente ´ ´ ´ ´ vers le marche risquent de depasser les avantages retires. les considerations de recherche en ´ mercatique internationale. Cui et Erik Kwok Yeung Li ´ Mots-cles Marches d’exportation. Gestion strategique. ´ ´ ´ Mercatique internationale L’etude que voici est motivee par le theme du numero special que voici de la Revue ´ ´ ` ´ ´ Internationale de Mercatique. 5. ´ ´ ` Cependant. L’etude que voici met en evidence les developpements en ´ ´ ´ ´ ´ mercatique internationale. qui met en evidence le succes economique enorme remporte par ´ ` ´ ´ ´ les nations d’Asie Pacifique et leur apparition en tant que mercaticiens du vingt-et-unieme siecle ` ` au niveau mondial. Commerce electronique. 20 No. ainsi que l’accroissement de ´ ´ ´ leur integration internationale et de leur cooperation avec le reste du monde. nos resultats suggerent que les comportements d’exportation orientes vers le ´ ` ´ marche constituent des facteurs importants permettant de predire plusieurs dimensions de la ´ ´ performance a l’exportation. Nous explorons ´ ´ dans chaque section. Cadogan. l’apparition de societes ´ ´ ´´ multinationales asiatiques. le developpement de marques asiatiques. Marques. Nous nous sommes servis de ´ ´ ` donnees obtenues au moyen d’un sondage entrepris aupres de fabricants exportateurs etablis a ´ ` ´ ` Hong Kong. dans des conditions de turbulence ecologique faible. Saeed Samiee et Leslie Sai-Chung Yip ´ Mots-cles Asie Pacifique. 2003 French abstracts # MCB UP Limited 0265-1335 . Anthony Benedetto et Michael Song ´ Mots-cles Choix strategiques. ´ ´ Prise de decisions ´ Dans l’etude que voici. ´ ´ ´ ´ ´ Le rapport qui existe entre le type strategique et les capacites de la firme dans les firmes chinoises C. Comportement. Charles C. nous soulignons toute une serie de ˆ ´ ´ ` ´ developppements importants. ´ Reglements concernant l’environnement. nous proposons que les firmes appartenant a differents types ´ ` ´ strategiques. Performance de l’entreprise. ` ´ ´ ´ ` Comportement d’exportation oriente vers le marche et performance a ˆ ´ ´ ´ l’exportation: les roles moderateurs de l’intensite competitive et de la turbulence technologique John W. pour ces entreprises. Societes multinationales. les possiblities qui s’offrent et les questions de recherche qui meritent ´ ´ d’etre considerees de plus pres. l’importance des rapports ´ et des reseaux pour les firmes etablies dans la region en question.

ces effets ¸ etaient plus faibles. Catalogues en ligne La recherche que voici s’efforce d’examiner les differences qui existent. Nous avons discute les implications de l’e ´ ´tude et sugge ´ des recherches ´re supplementaires. elle ¸ cherche a identifier un modele pour les facteurs qui influencent le comportement d’achat par ` ` Internet. Etats-Unis. par rapport aux effets ayant trait aux echantillons ´ ˆ ´ core ´ens. le caractere innovateur de l’Internet.Khan ´ Mots-cles Options de change. nous proposons que les prospecteurs possedent de plus grandes capacites ` ` ´ d’externalisation relatives et de plus grandes capacites informatiques. risques percus et caracte innovateur ¸ Cheol Park et Jong-Kun Jun ´ ´ Mots-cles Mercatique par Internet. republique de la Coree du sud. dans l’utilisation de l’Internet. nous ` ´ avons trouve des differences culturelles dans les effets de l’utilisation de l’Internet et les risques ´ ´ percus sur le comportement d’achat par Internet.IMR 20. Tandis que le gouvernement central assume un role reduit dans la gestion ´ ˆ ´ des entreprises et que les directeurs d’entreprises chinoises deviennent de plus en plus responsables pour leur propre prise de decisions strategiques. mais qu’il n’existait aucune difference importante dans ´ ´ ´ les intentions d’achat par Internet ou l’experience d’achat en ligne. Marches d’exportation. Cependant. Il importe que les firmes dans le monde entier ´ comprennent l’environnement commercial chinois. Nous mettons nos propositions a l’essai de maniere empirique et les renforcons par ` ` ¸ des preuves. Globalisation ´ L’article explore l’impact produit sur les exportations dans les nations ANASE (dont le bloc ´ commercial est connu sous le nom d’AFTA Zone de Libre-Echange Asiatique) par les afflux croissants d’investissements directs etrangers et l’augmentation des investissements en ´ infrastructure pour la technologie de l’information et de la communication. Nos resultats indiquaient qu’il y avait de grosses ´ differences dans l’utilisation de l’Internet et les risques percus des achats par Internet. Une comparaison transculturelle du comportement d’achat par Internet: effets de `re l’utilisation de l’Internet. en nous servant d’un ensemble de donnees provenant de 245 firmes chinoises. Nous concluons en discutant les implications pour les directeurs d’entreprises. en analysant un ´ modele de regression des facteurs qui influencent le comportement d’achat par Internet. entre les ´ ¸ consommateurs coreens et americains. ´ ´ L’effet produit par les afflux d’investissements directs etrangers et l’infrastructure pour la technologie de l’information et de la communication sur les exportations dans les pays de l’ANASE/AFTA: une comparaison avec d’autres ´ ´ blocs regionaux dans les marches naissants Taewon Suh et Omar J. ´ comprenant surtout des entreprises de l’etat. tandis que les defendeurs ´ ´ ont de plus grandes capacites d’internalisation relatives et de plus grandes capacites de ´ ´ mercatique. ´ ´ ¸ Innovation. entre la Coree et ´ ´ l’Amerique. les risques percus et le caractere ´ ¸ ` innovateur. afin d’obenir un avantage competitif ´ ´ ` ´ durable.5 472 a-dire que certaines capacites seront plus importantes pour certains types strategiques. tandis que l’economie chinoise subit une ´ expansion rapide et une decentralisation de la prise de decisions strategiques au niveau de ´ ´ ´ l’entreprise de l’etat. il s’agit de comprendre clairement ´ ´ les capacites et avantages specifiques a l’entreprise. tel qu’il est explique par l’utilisation de l’Internet. Plus ` ´ ´ particulierement. par rapport a ` . les risques ´ ` percus que posent les achats par l’Internet. Risques percus. et les comportements d’achat par Internet. sur une base transculturelle. Tandis qu’il s’agissait des effets principaux de ¸ l’utilisation de l’Internet et des risques percus du comportement d’achat par Internet. ou meme contraires.

deux autres blocs commerciaux principaux: l’ALECE et la LAIA (Association latino-americaine ´ d’integration). Les analyses se fondent sur des donnees provenant d’un groupe representatif de ´ ´ ´ pays (26 marches naissants appartenant a trois blocs commerciaux) au cours d’une periode ´ ` ´ determinee (de 1995 a 2000). Les resultats indiquent que l’augmentation des investissements en ´ ´ ` ´ infrastructure pour la technologie de l’information et de la communication ne produit des resultats positifs et significatifs dans le niveau d’exportation national que pour l’echantillon de ´ ´ l’ANASE/AFTA et de l’ALECE. Ce qui est interessant, c’est que l’impact produit par les afflux ´ croissants d’investissements directs etrangers sur les exportations n’est important que dans les ´ echantillons ALECE et LAIA. Nous discutons ces resultats a la lumiere des differentes ´ ´ ` ` ´ experiences economiques de ces blocs commerciaux, en observant qu’il existe des variations ´ ´ typiques entre les divers pays. Dans l’ensemble, pour refleter les resultats de cette etude, toute ´ ´ ´ recherche traitant des facteurs qui determinent le niveau d’exportation national devrait etre ´ ˆ menee independamment et inclure les caracteristiques regionales et nationales. ´ ´ ´ ´

French abstracts


IMR 20,5

Spanish abstracts
´ ´ Marketing internacional y la region de Asia-Pacıfico: desarrollos, oportunidades y ´ cuestiones de investigacion Paul Chao, Saeed Samiee y Leslie Sai-Chung Yip


Palabras clave Asia-Pacıfico, comercio electronico, marcas, empresas multinacionales, ´ ´ marketing internacional Este estudio esta motivado por el tema de esta edicion especial de International Marketing ´ ´ Review, que destaca el enorme exito economico de las naciones de Asia-Pacıfico y su ´ ´ ´ surgimiento como comercializadoras globales del siglo XXI. El exito de las empresas situadas ´ en estas naciones ha sido aun mas pronunciado desde 1990. Este estudio destaca los desarrollos, ´ ´ oportunidades y cuestiones de investigacion del marketing internacional que merecen una ´ mayor atencion. Al examinar el tema, ponemos de relieve una serie de desarrollos importantes, ´ incluyendo innovaciones tecnologicas, la penetracion e influencia de Internet y el comercio ´ ´ electronico en la region, el surgimiento de empresas multinacionales asiaticas, el desarrollo de ´ ´ ´ marcas asiaticas, la importancia de las relaciones y las redes para las empresas de esta region, y ´ ´ su mayor integracion y cooperacion internacional con el resto del mundo. Se exploran ´ ´ consideraciones de investigacion del marketing internacional relacionadas con la region de ´ ´ Asia-Pacıfico en cada seccion, ası como en nuestras conclusiones. ´ ´ ´

´ Comportamiento orientado hacia el mercado de exportacion y rendimiento de ´ exportacion: las funciones moderadoras de la intensidad competitiva y la ´ turbulencia tecnologica John W. Cadogan, Charles C. Cui y Erik Kwok Yeung Li Palabras clave Mercados de exportacion, comportamiento, reglamentos medioambientales, ´ Hong Kong Este estudio examina la cuestion de como los comportamientos orientados hacia el mercado de ´ ´ exportacion influyen sobre el exito exportador. Nuestros descubrimientos, utilizando datos de ´ ´ encuestas obtenidos de exportadores fabriles ubicados en Hong Kong, sugieren que los comportamientos orientados hacia el mercado de exportacion son pronosticadores importantes ´ de varias dimensiones del rendimiento exportador. En particular, parece que dicho comportamiento es mas importante para exportadores que operan bajo condiciones de gran ´ turbulencia medioambiental. El comportamiento orientado hacia el mercado de exportacion la ´ relacion de rendimiento exportador de estas empresas fue generalmente positivo y fuerte. No ´ obstante, bajo condiciones de baja turbulencia medioambiental, los costes de desarrollar e implantar niveles altos de comportamiento orientado hacia el mercado de exportacion pueden ´ superar los beneficios obtenidos.

´ ´ La relacion entre el tipo estrategico y las capacidades empresariales en empresas chinas C. Anthony Benedetto y Michael Song
International Marketing Review Vol. 20 No. 5, 2003 Spanish abstracts # MCB UP Limited 0265-1335

Palabras clave Elecciones estrategicas, rendimiento empresarial, China, gestion estrategica, ´ ´ ´ toma de decisiones En este estudio, proponemos que las empresas de diferentes tipos estrategicos de Miles y Snow ´ poseeran diferentes grupos de capacidades a nivel de empresa; es decir, ciertas capacidades ´

seran mas importantes para ciertos tipos estrategicos. Especıficamente, proponemos que las ´ ´ ´ ´ prospectoras tienen mayores capacidades relativas de ‘‘dentro-fuera’’, ası como capacidades ´ informaticas, mientras que las defensoras tienen mayores capacidades relativas de ‘‘fuera´ dentro’’ y capacidades de marketing. Ensayamos empıricamente, y encontramos apoyo para ´ nuestras proposiciones, utilizando un conjunto de datos de 245 empresas chinas compuestas principalmente por empresas propiedad del estado. Comprender el entorno de negocios chino es importante para los negocios de todo el mundo, a medida que la economıa china realiza una ´ rapida expansion y descentralizacion de la toma de decisiones estrategicas, hasta el nivel de las ´ ´ ´ ´ empresas propiedad del estado. A medida que el gobierno central desempena una menor ˜ funcion dentro de la gestion de empresas, y los gerentes empresariales chinos se hacen mas ´ ´ ´ responsables de su propia toma de decisiones estrategica, se requiere un entendimiento claro de ´ las capacidades y ventajas especıficas de la empresa para lograr una ventaja competitiva ´ sostenida. Concluimos con una discusion de las implicaciones gestoras. ´

Spanish abstracts


´ Una comparacion transcultural del comportamiento de compra por Internet: ´ efectos del uso de Internet, riesgos percibidos e innovacion Cheol Park y Jong-Kun Jun Palabras clave Marketing de Internet, republica de Corea del sur, EE UU, riesgos percibidos, ´ innovacion, catalogos en lınea ´ ´ ´ Esta investigacion intento examinar las diferencias en el uso de Internet, el caracter innovador ´ ´ ´ de Internet, los riesgos percibidos de la compra por Internet, y los comportamientos de compra por Internet, entre Corea y America, ası como identificar un modelo para factores que influyen ´ ´ sobre el comportamiento de compra por Internet, explicado por el uso de Internet, los riesgos percibidos y el caracter innovador, sobre una base transcultural. Nuestros resultados mostraron ´ que existıan diferencias significativas en el uso de Internet y en los riesgos percibidos de la ´ compra por Internet, pero no diferencias significativas en las intenciones de compra por Internet o la experiencia de compra en lınea, entre los consumidores coreanos y americanos. No obstante, ´ se descubrieron diferencias analizando un modelo de regresion de factores que influyen sobre el ´ comportamiento de compra por Internet, y diferencias culturales en los efectos del uso de Internet y los riesgos percibidos en el comportamiento de compra por Internet. Aunque se observaron efectos principales del uso de Internet y el riesgo percibido en el comportamiento de compra por Internet, dichos efectos fueron mas debiles o incluso opuestos a aquellos ´ ´ relacionados con las muestras coreanas. Las implicaciones del estudio se discutieron y se sugirio mayor investigacion. ´ ´

´ El efecto de entradas de IED e infraestructura de TCI al exportar a paıses de ´ ASEAN/AFTA: una comparacion con otros bloques regionales en mercados emergentes Taewon Suh y Omar J. Khan Palabras clave Opciones de cambio extranjero, mercados de exportacion, globalizacion ´ ´ Este trabajo explora el impacto de las entradas de inversion extranjera directa (IED) y el ´ aumento de las inversiones en infraestructura de tecnologıa de comunicaciones e informatica ´ ´ (TCI), sobre la exportacion en naciones ASEAN (el bloque comercial conocido como AFTA) en ´ comparacion con otros dos bloques comerciales importantes: CEFTA y LAIA. Los analisis se ´ ´ basan en datos tomados de una seccion transversal de paıses (26 mercados emergentes de tres ´ ´

el impacto del aumento de entradas de IED en la exportacion solo es ´ ´ significativo en las muestras de CEFTA y LAIA. solo en la muestra ASEAN/AFTA y CEFTA. reflejando los resultados de este ´ estudio. Los resultados muestran que el ´ incremento de las inversiones en infraestructura de TCI ofrece unos beneficios positivos y significativos en el nivel de exportacion nacional. ´ ´ Peculiarmente. observando que tıpicamente ´ ´ se producen variaciones entre paıses individuales. En general.5 476 bloques comerciales) a traves del tiempo (de 1995 a 2000). deberıa realizarse independientemente investigacion relacionada con los determinantes ´ ´ del nivel de exportacion nacional.IMR 20. Estos resultados se discuten a la luz de las diferentes experiencias economicas de estos bloques comerciales. junto con las caracterısticas regionales y nacionales. ´ ´ .

5. 2003 Japanese abstracts # MCB UP Limited 0265-1335 .Japanese abstracts Japanese abstracts 477 International Marketing Review Vol. 20 No.

IMR 20.5 478 .

Japanese abstracts 479 .

The Emerald Research Register for this journal is available at http://www.emeraldinsight.com/researchregister

The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0265-1335.htm

IMR 20,5

International marketing and the Asia-Pacific Region
Developments, opportunities, and research issues
Paul Chao
University of Northern Iowa, Department of Marketing, Cedar Falls, Iowa, USA


Saeed Samiee
College of Business Administration, The University of Tulsa, Tulsa, Oklahoma, USA, and

Leslie Sai-Chung Yip
Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong
Keywords Asia-Pacific, Electronic commerce, Brands, Multinational companies, International marketing Abstract This study is motivated by the theme of this special issue of International Marketing Review, which highlights the enormous economic success of Asia-Pacific nations and their emergence as global marketers of the twenty-first century. The success of firms situated in these nations has been even more pronounced since the 1990. This study highlights international marketing developments, opportunities, and research issues that warrant closer attention. In examining the topic, highlights a number of important developments including technological innovations, the penetration and influence of the Internet and electronic commerce in the region, the emergence of Asian multinational companies, the development of Asian brands, the importance of relationships and networks for firms in this region, and their greater international integration and cooperation with the rest of the world. International marketing research considerations pertaining to the Asia-Pacific Region are explored in each section, as well as in the conclusions.

International Marketing Review Vol. 20 No. 5, 2003 pp. 480-492 q MCB UP Limited 0265-1335 DOI 10.1108/02651330310498744

Over the last two decades an increasing number of Asian economies have adopted new economic policies that have bolstered their presence in the global marketplace. This development has received a great deal of press coverage and academicians are demonstrating greater interest in pursuing Asia-specific projects. Despite such coverage, little attention seems to have been paid to certain key developments in Asian economies that have positioned them for an even greater success in the years to come. An even sharper focus on Asia is timely and warranted for several reasons. As these markets are culturally and geographically removed from the traditional business centers of North America and Europe, detailed knowledge with respect to prevailing conditions in Asian markets is diluted and vague, if not lacking. Information flow with regard to social, legal, and technological

progress in Asia continues to be limited. Furthermore, Asian markets include the two most populous nations of the world, which possess over one-third of the world’s population as well as enormous natural and human resources. More importantly, key Asian markets are developing at an accelerated rate that is rapidly expanding demand for all types of products and services. Concomitant with these developments is the need to pursue an intensive research agenda in Asia-Pacific contexts. In this article, we aim to explore the developments, the opportunities, and the future research possibilities in Asian markets. Among others, we advocate the need for a greater focus on Asia-Pacific research projects. Such an aggressive research agenda includes an (re)examination of existing and new concepts and theories to validate them within Asia-Pacific contexts. By extension, such investigations also enrich our understanding of, and appreciation for, this very important region of the world. Clearly, given the vastness of the region and the presence of many different cultures and economic and political dynamics, we will only highlight the main elements pertaining to a few markets, rather than offering a comprehensive set of research topics or a full account of the events on the continent. In particular, we will focus on developments and conditions which will have a significant influence on market opportunities in Asia. In doing so, we examine Asian-based technological innovations, the penetration and influence of the Internet and electronic commerce (e-commerce) in the region, the emergence of Asian multinational companies (MNCs), the development of Asian brands, the importance of relationships and networks, and the region’s greater international integration and cooperation with the rest of the world. In exploring each topic, we propose several research questions that will help shed light on important international marketing issues pertaining to Asia-Pacific. Technological innovations Asian economies have dominated the market in a number of existing and emerging markets. Two examples from Japan demonstrate both the technological capability and the marketing savvy of Asian firms. In the mobile telephone market, NTT DoCoMo has been a clear leader in developing and marketing online telephones. The enormous success of the firm is reflected in the significant market penetration of DoCoMo telephones among the Japanese. NTT DoCoMo has now developed the third generation of mobile telephones (3G) and is introducing it into global markets.[1] Another example is the Japanese firms’ dominance in electronic games that were initially envisioned and developed by US firms (e.g. Atari and ColecoVision), but were manufactured in Asia. Such firms as Nintendo, Sega, and Sony have been uncontested leaders in this industry for nearly two decades. Although some competition from North America is now forthcoming, Japan continues to possess the lion’s share of the market. Indeed, attempts by such late-entrants as

International marketing


IMR 20,5


Microsoft Xbox to compete in the crowded Japanese game console and software markets demonstrate how much US multinationals are following the lead of Asian firms while signifying the importance of Asian markets (Wildstrom, 2001). Technological innovations based in Singapore and Taiwan have also set the stage for greater influence in the shape of things to come. A Singaporean firm, Creative Technologies, for example, is the world’s largest maker of computer sound cards and its SoundBlaster card has become the standard for PC audio. The technological capabilities of Asian markets are backed by efficient and low-cost manufacturing facilities and a large army of highly trained engineers and production workers. Malaysia, for example, has been the leading producer of memory chips for many years. Taiwan and Korea manufacture laptop computers under various well-known global brands of computers throughout the world. In China, Legend was initially a distributor of foreign PCs, but started manufacturing and selling its own computers in 1990 (Powell, 2002). Today, with its 28 percent market share, Legend is a formidable competitive force in the rapidly growing Chinese PC market (Knowledge@Wharton, 2003). According to IDC, Legend’s closest foreign competitor, Dell, with a manufacturing plant in China, had a market share of less than 6 percent at the end of 2002. These developments and conditions point to the technological agility and savvy in Asian markets. Western markets can no longer claim a technological monopoly that drives many products. If for no other reason, by virtue of controlling downstream activities, Asian countries can exert much influence on what is produced and how it is produced and marketed, and can introduce or even impose product standards and features for world markets. The dominance of Asian competitors in technology markets has largely gone unnoticed. It is noteworthy, for example, that seven out of the top ten global information technology (IT) firms (based on their performance over the last 12 months) are located in Southeast Asia (BusinessWeek, 2002a). The USA continues to be a major force in IT markets, but Asian countries are gaining fast. Just over one-half (51) of the firms in the list of top 100 IT firms are US-based. In spite of such technological advances, consumers in the West continue to hold poor or negative perceptions of products from most Asian countries. It is no secret that many Western consumers are leery of products manufactured in most Asian countries. However, Asian firms and governments are aware of this deficiency and have instituted quality processes and programs to address this shortcoming. Not surprisingly, they are increasingly noticed by such authoritative sources as Consumer Reports (Lundegaard, 2003). Korea and Taiwan, among other Asia-Pacific nations, are understandably frustrated by the negative public perceptions regarding their products. In an attempt to counteract this negative bias, Taiwan has engaged in a series of

of the 28 million total global subscribers to broadband Internet service. In this regard. respectively. the Internet has become an integral part of daily lives in some markets. or is close to the leading country in terms of using the Internet for entertainment. e-mail. Such countries as Japan. A high level of reliance on the Internet potentially signifies the International marketing 483 . Further.410 consumers has demonstrated HK people’s relatively high level of sophistication in and enthusiasm for the Internet and e-commerce (American Express. The question of whether such government-sponsored media campaigns are effective in reassuring consumers remains to be answered. no study has addressed the issue of how special international events may influence product/country images of an Asian country. HK tops the list in terms of the percentage in its population with fast connection to the Internet. In fact. The first question concerns whether there are country equity or image improvements associated with such special international events. In fact. e-commerce is very much integrated into firms’ operations and consumer lifestyles. to its products. China’s successful bid to host the 2008 Olympic games (the third Asian country to do so in recent years after Japan and Korea) offers a great opportunity for extending country image studies in a Chinese context. by extension. the results of a ten-country survey involving 11. Hong Kong SAR (HK). over 12 million are in Asia. The survey reveals that HK residents lead the other countries in terms of the influence of the Internet on how they view shopping and banking. Available data indicate that Korea and Japan are ranked second and third in terms of broadband connection to the Internet (seven million and two million. With the exception of a study by Jaffe and Nebenzahl (1993). as a result. For example. travel information and reservations. versus ten million for the US). two research questions are worthy of consideration. shopping. banking and financial transactions. Indeed. most of which are located in Southeast Asian nations. 2000). more HK residents associate convenience with shopping and banking on the Internet than other nations included in the study[2]. did the image of Korea improve as a result of its recent co-hosting of the World Cup? The second question concerns whether the international standing or equity of brands manufactured or associated with the host country simultaneously improves. Both questions offer an opportunity to design and implement longitudinal studies that address these topics. and monitoring credit card statements.government-sponsored media campaigns in the USA to promote the quality of their products by reinforcing the notion that they are “very well made in Taiwan”. and Singapore have made enormous investments in IT and. HK has the lead. an interesting research question might address whether the additional visibility gained by staging the Olympic games offers China a significant boost to its image and. information searches. Embracing the Internet and e-commerce Despite governmental controls in some Asian countries. Concurrently.

Research projects in this regard can illuminate the impact of e-commerce on how innovations are globally adopted and traded. The emergence and quick penetration of 3G systems in Asian nations is likely to result in a more rapid growth of e-commerce in this region than in other countries. affords them leadership in an increasingly influential area of e-commerce. Figure 1. supply chain management. The rapid diffusion of wireless technology and the concomitant emergence of e-commerce in the region should generate much interest in this line of research. face relatively lower global e-commerce growth rates. these products are exported. Once production outstrips demand in the initiating country. China Mobile (HK) has just announced its intended launch of its 3G Systems ahead of it rivals in the US or Europe. This is in part because of the rapid penetration of mobile telecommunications in such important markets as Japan. production costs are still competitive. and China. ongoing Internet connection (Moon. 2002). where Internet infrastructures are well-developed. but unlike countries such as Japan. about 64 percent of the population carry a mobile telephone and the three mobile telephone firms there (KT Freetel.IMR 20. Emerging markets like Korea and Taiwan. in particular contract negotiation. In Korea. wherein impersonal modes of shopping and banking have gained acceptance. where Internet infrastructures are also fully developed. For example. Figure 1 demonstrates the global e-commerce potential of a sample of Asia-Pacific nations. and LG TeleCom) are rapidly implementing the 3G system which offers rapid. Such markets as Japan and Singapore. Given the very personal and relatively high context nature of cultures in the region. The existing success and deep market penetration of NTT DoCoMo in an increasing number of markets. The influence of IT penetration on the growth of global e-commerce . academic research is needed to uncover how this trend is influencing aspects of international marketing.5 484 emergence of a new or modified cultural environment in the more advanced Asia-Pacific countries. and distribution strategies. along with Korean firms conversion to 3G. Korea. the international product life cycle theory (IPLC) posits that new technologies are first developed and introduced in advanced industrialized countries. Market potential for IT and e-commerce is unevenly distributed across Asian nations. are prime candidates for realizing a more rapid growth in global e-commerce. The Internet and e-commerce have the potential of either modifying or changing the traditional IPLC view. SK Telecom. for example.

consumer evaluation of online service qualities has received only modest attention.. the SERVQUAL scale has guided research for consumer services evaluations in the US (Parasuraman et al. 1988). however. a shorter lead time between assembly and International marketing 485 . For example. Kyocera. the question of whether these constructs are universal and appropriate for use in a broad range of international markets remains critical for international marketers and offers additional opportunities for research. Acer opened a small representative office in Moscow in 1993 to develop a network of distributors (Bruton and Samiee. Toyota. they are moving their production facilities closer to their markets with the hope of gaining a foothold in key markets and/or integrating their operations downstream. What is increasingly visible in the business press. 1985. Asian MNCs have aggressively pursued emerging markets around the world by establishing an increasing number of assembly and manufacturing facilities.. cross-cultural differences may influence the ways in which Asian consumers evaluate web sites and this issue has not received adequate attention. Since its development in the 1980s. a Taiwanese firm headquartered in Singapore. Conditions in these markets are more risky. Matsushita. but competition is less intense and markets are generally undeveloped insofar as the availability of good quality. however.Whereas various reports have indicated rapid growth in the number of Asian online consumers (NUA. 2002a). 2002). Increasingly. These growing enterprises have served as suppliers to firms around the world for many years. 1998). for example. including China and Mexico (Holstein. good value products are concerned. With its manufacturing facilities in Taiwan. For example. and Nissan are among global leaders in their respective industries and it is routine to note these firms’ names and activities in various media. and Acer. has aggressively pursued markets in Central and Eastern Europe. Haier of China. it had a relatively long lead time for delivery. under CEO Yun Jong Yong. Samsung is currently the No. 2002a. In addition to the unresolved issue of the underlying differences in service quality constructs associated with different modes of service delivery.. has been transformed into a multinational powerhouse. Zeithaml et al. Samsung. Japanese MNCs have increasingly established footholds in markets around the world. Acer. 2000. The emergence of Asian MNCs For over two decades. 1 of the four major Korean chaebols and maintains manufacturing facilities in 14 countries. Recent research has extended the application of this scale to the e-commerce arena (Lociacono et al. is the emergence of MNCs based in other Asian countries. b). Today Samsung generates 70 percent of its revenues from outside of Korea. which eroded its competitive edge. are some of the relatively recent additions to the list of MNCs. In addition. Sony. Samling Malaysia and Malayan WTK. Samsung and LG of Korea.

Given the high risks associated with locating a plant in Russia. The competition is so intense that it has virtually driven out several foreign brands. and Huawei are now competing in the Chinese mobile telephone market.4 percent) (The Economist. The reason for the limited presence of international Asian brands is in part historical.9 percent) and Samsung (6. 2003). Today. Samsung. With the notable exception of Japanese firms that possess a substantial number of well-known. Nokia. an increasing number of Taiwanese firms have turned to the practice of processing orders in Taiwan. In all. 2002). for example. Through its QDI subsidiary. To benefit from lower costs of manufacturing in China. and other MNCs is clear. there are an increasing number of very capable domestic firms that are expected to enter the international arena in the short term. Legend Computers of China is but one example. their manufacturing facilities in Lappeenranta. The implication of such developments for Motorola. Likewise. Finland are their main source of supply for the emerging countries of Europe as well as for the adjacent developed nations of the continent. thus creating an enormous competitive pressure in the domestic market. Brand development Widely recognized regional and global brands are essential in competing internationally. Research on global marketing strategies deployed by Asian MNCs is needed to fill this gap in the literature. publicized. and respected brands and several Korean firms that are marketing their brands internationally. Legend is already engaged in selling parts and components in Europe and Asia (Knowledge@Wharton. 2003). 2002). Finally. Many Asian firms continue to serve as subcontractors or contractors to firms abroad and manufacture high quality products under other well-known brands.5 486 delivery would reduce costs and permit Acer to be more price-competitive. Einhorn et al.1 percent) has passed Siemens (6. Asian firms have not devoted sufficient attention and resources to developing regional or global brands (Doebele. China’s TCL (market share 8. Lower paid Chinese employees work in the Korean plant and more skilled and experienced Korean employees provide managerial leadership in the Chinese plant (Booth. including Ningbo Bird. Amoisonic.IMR 20. Figure 2 demonstrates the relationship between global branding and key market access/entry strategies pursued by Asian countries. 2003. including Ericsson of Sweden. Given the large number of MNCs headquartered in .. but shipping goods out of their plants in China. maintains production facilities in both Korea and China.3 percent) to become China’s third-largest cellular handset vendor after Motorola (28 percent) and Nokia (22. Acer decided to set up its operations for Central and Eastern Europe close to but away from the turbulent Russian business environment. 36 manufacturers. Other Asian MNCs are also rapidly learning how to leverage their global competencies to remain globally competitive.

The development of globally recognized brands is essential if these firms are to differentiate their products. Countries like India. Likewise. 2003). A handful of firms have already established admirable brands and positions within their respective industries. are rapidly gaining a foothold in 160 countries. and value. 2001). With a 27. which continue to generally rely on contract manufacturing and exporting. as well as with a high quality service. China. Legend Computer is the largest manufacturer of PCs in China – a market that will soon overtake Japan as the second largest market (Knowledge@Wharton. Others. the nation is unique in the region. Hello Kitty. Other well-known international brands based in Asia Pacific countries include Shangri-La Hotels (ranked 4). this is an area to which substantial resources must be committed if Asian firms are to replicate the success demonstrated by Japan. Not surprisingly. including the USA (Flannery. G2000 (HK-made apparel). these brands are rated as the second and fifth best known Asian brands (The Great Asian Brands Survey. for example. like Korea and Taiwan.Japan. Singha Beer. good service. 2001). Cathay Pacific Airways’ brand image flawlessly ties in with Hong Kong’s image as one of the most vibrant cities in the world. on the other hand. with plants in 13 countries. is synonymous with utmost quality in service and travel experience. have developed some global brands. However. and to enjoy larger margins and market shares. ranked 6). brands. has the potential to quickly turn successful domestic brands into internationally competitive ones. This practice has served firms in the region well for several decades. Maggi. International marketing 487 Figure 2. let alone global. Asian firms are aware of the importance of international brands and are gradually developing brands that are widely recognized. San Miguel beer (The Philippines. ranked 8). Furthermore. for example. 2002). to penetrate consumer and business markets. but much more is necessary for them to be able to compete effectively against other global giants.7 percent market share in 2002. Other brands outside Japan and Korea are much lesser known internationally but several promising ones are on the horizon: Lee Kum Kee. and Creative Technologies (Singapore. are almost entirely reliant on unbranded raw material exports or contract manufacturing with hardly any international. Legend has already established a respectable name for itself by offering high quality. with its very large market. Haier appliances from China. Japanese MNCs are clearly global marketers in every sense of the term. International marketing strategy and global branding . and Royal Selangor Pewter (Malaysia) (Flannery. Singapore Airlines’ brand.

Despite the importance of relationships and networks in this part of the world. 2003). However. all else being equal. Samsung. 1996. Asian firms have both a cultural as well as a networking advantage in their home market. through its consistent pursuit of research. has managed to become one of the leading global brands. 1989a. for example.IMR 20. the manner in which Asian MNCs can create respected global brands like Sony and Toyota remains a critical research issue. Tavassoli. There are indications in the literature as to how Asian companies can effectively communicate their brands or county images in the Western markets. That is. Brand reputations are of great concern to Asian MNCs. Some firms do not believe their brands receive the recognition or respect they deserve. 2003). 1993) strategies are but two ways companies in Korea and Taiwan can circumvent poorly perceived country images associated with products made in those countries. For example. All firms possess “some” network in managing their operations. relationships and networks naturally exist in this part of the world and their primary purpose is not that of a commercial transaction. for example. however. and culture. licensing of new technologies. scholars have only recently begun to apply . has a branch selling TV sets and mobile telephones in nearly every town (The Economist. 1999. That is.5 488 The success of some Korean companies may serve as one model or path to brand development by other firms. Zhang and Schmitt. the large mobile telephone manufacturer. relationships are critically important in people’s daily lives and their societal purpose always supercede commercial transactions. in addition to having the ability to more easily adapt to local needs. Asian firms have the added advantage of more easily maneuvering around the regulatory and bureaucratic requirements in their region (see Knowledge@Wharton. local brands such as Legend Computers in China. b) and pricing (Chao. Retail distribution (Chao. Samsung is currently ranked number 42 among the global 100 brands (BusinessWeek. 2001). A limited number of international branding studies have focused on how firms can create and establish brand names in Asia to enhance consumer perceptions (Pan and Schmitt. have a significant competitive advantage over MNCs owing to their local relationships and networks. 2001). Relationships and networks A key strength in Asian business practice is reliance on personal and business relationships and networks to accomplish business tasks and consummate transactions. the domestic brands have networks that reach deep into not only the cities but also the very large rural regions where mass media tends to be less effective. Still. development. Whereas the MNCs can develop savvy marketing campaigns and heavily promote their products in large Chinese metropolitan areas. tastes. Based on estimated brand value. TLC. and foreign investment initiatives to bring it closer to its markets and customers.

the scope of their international involvement would be limited to competing as contract manufacturers or marginal exporters. 2003). such as China. China’s admission to the World Trade Organization constitutes a major shift in regional economic policy for the nation while influencing competition in the region (Chandler. Others. A third group. are rapidly developing. the development of respectable international brands is potentially the most critical challenge. 2001). As noted earlier. For firms within the region wishing to directly compete for market share in markets abroad. much of this effort is focused on China. Haier products are already being marketed in 160 countries and the computer maker Legend will increasingly seek to cultivate international markets as foreign competitors enter its traditional turf (Flannery.the relationship marketing paradigm within an Asian context and. Businesses should recognize that conditions within and among Asian markets vary considerably from one country to the next (Walters and Samiee.5 billion and produce a combined GDP of US$19 trillion. Likewise. Cambodia. It is also common for many Western businesses to culturally cluster Asian nations together and to further assume that market information in these markets is easy to obtain. Concurrently. Within the next few years. and Myanmar. such as Japan. but advances are uneven across this vast nation. there is wide-spread support for the movement and its objectives. Greater international integration and cooperation For some time Asia-Pacific Economic Cooperation (APEC) Forum has been trying to emulate the success of the European Union in removing barriers to trade while accommodating economic development. thus far. Several markets in the region. 2003). the heterogeneous nature of these markets demands a close market-based attention. are fully developed. Although APEC’s vision of reaching its goals by no later than 2020 remains uncertain owing to economic and political problems in a number of member countries. APEC nations are home to a population of over 2. as more Chinese manufacturers are privatized. APEC Forum has 21 members which account for 47 percent of world trade. International marketing 489 . they will expand internationally to reduce their risk while enhancing growth opportunities. Opportunities and implications A major challenge facing international marketers wishing to enter markets in Asia is the highly varied levels of economic development and IT penetration. including Vietnam. leading to the conclusion that Asian markets cannot be cultivated with a single regional strategy. In the absence of such development. on the other hand. faces substantial infrastructure and development challenges. Thus. many of China’s policies will need to be in line with those of other nations and China must open its markets to competitors from other countries.

however. is over two decades old and is now receiving much attention from scholars. 3G operates at speeds of 40 times greater than i-Mode. 2002). Fortune. This competency is clearly a critical one in developing successful brands that can be differentiated from other offers. in terms of training. Booth. these firms are also competent in not only negotiating and dealing with Western customers. Albeit slow. 14-15. its use is very economical. and the drivers of. scholars have increasingly pursued projects involving the application of relationship marketing to the Asia-Pacific cultures. “Online attitudes move in line across the globe. Such research initiatives. Italy. Australia.” in The 2000 American Express Global Internet Survey. It is believed that this will present a major challenge for DoCoMo as it attempts to replicate the success of i-Mode (Belson. offer excellent topics for investigation in an increasingly important region and their pursuit should be promoted. As it turns out. References American Express (2000). In particular. October. In particular. and encouraged. J.5 490 Conditions currently seem to favor enormous development and growth opportunities in Asia. the cultural imperatives of Southeast Asian nations offer an excellent fit for applying the relationship marketing concept. but also in managing very efficient production facilities. software and hardware. dating back and forth between two nations. along with others proposed in this article. Furthermore. Great Britain. and as Asian firms spread across time zones and continents. There are tremendous research opportunities involving Asia-Pacific nations. the paradigm was rarely applied in international contexts. investments in IT. The relationship marketing field. Sweden. their competence in IT will permit them to grow faster and more efficiently than their rivals. supported. The Wall Street Journal. for example. In recent years. Canada. Effective communication is central to coordination and control of firms. HK-based scholars have been on the forefront of.IMR 20. April. developing a rich literature in relationship marketing in a Chinese context. Notes 1. (2002). K. NTT DoCoMo developed and successfully marketed the i-Mode mobile telephone in Japan. Japan. Asian firms have learned how to maintain a very high level of quality in production. These phone are connected to the Internet at the speed of 9600 bps. (2002). In contrast. and the USA. A10. . Belson. By virtue of having served as suppliers to Westerns firms. but it also costs substantially more. Koreans make the best of both”. access. as contract manufacturers whose products are sold under well-known Western brands. Other nations included in the survey were Argentina. “Samsung in China: a leverage lesson. July. pp. “DoCoMo’s weak 3G reception”. 2. For much of its history. p. Brazil. at the very least accommodate the accelerated development of Asian multinationals and their corresponding brands.

. (2003). NY. pp. Summer.D.A. R. Fortune. V. NUA (2002b). p.edu (accessed March 12). and Berry. Zeithaml. 2. 36-8. and Heslop.L. Forbes. (1988). Product Country Images: Impact and Role in International Marketing. Roberts. Zeithaml. Journal of International Business Studies. L. 1. available at: http://nua. “Samung’s golden touch”. and Berry. Vol. B. Business Week. 291-306. pp. New York. March 6. 3. Lundegaard.O. B. working paper. Hyundai join Toyota in top consumer ranking”. Vol. 29 No.J. pp. Binghamton. Business Week (2002). “Winning in China”. July. Jaffe. pp. Lociacono. 58. 1. (2003). Summer. P. A. March. International marketing 491 . Chao. (2002). Holstein. pp. 51-64. “A conceptual model of service quality and its implications for future research”. 41-50. Knowledge@Wharton (2003).G. 433-52. April. (2000). 5 No. J. available at: knowledge@wharton. Flannery. Chandler. K. B. 20 No. “Temporal and associative memory in Chinese and English”. “Anatomy of a failed high technology strategic alliance in a transitional economy”. (1998). “Export and reverse investment: strategic implications for newly industrialized countries”. Chao. L. NUA (2002a). “Can a Chinese legend go global?”. and Schmitt. (2003). N. “The legend of legend”. (Eds). Y. N. 49. Business Week.. 35-41. “Global promotion of country image: do the Olympics count?”. Fortune. “GM.upenn.L. and Goodhue. R. (2002). August. 263-77.T. and Crockett. “Partitioning country of origin effects: consumer evaluations of a hybrid product”.D. (The) Great Asian Brands Survey (2002). Watson. (1999). “The local touch”. I. 26 July. (1989b). available at: http://nua. 21 June. Journal of International Business Studies. pp. Organizational Dynamics. Journal of Consumer Research. “SERVQUAL: a multiple-item scale for measuring consumer perceptions of service quality”. “Coping with China”. Journal of Advertising Research. Business Week (2001). 35-7. April-May. 12-40. (1993). R. Internet Surveys. Journal of Consumer Psychology. Chao. pp. pp. Einhorn. Parasuraman. E. Vol. BusinessWeek. “Language and brand attitudes: the impact of script and sound matching in Chinese and English”. Vol. (1985). D. S. L. C. Parasuraman. January. G. January. “No A for Asia”. T. 1.. I. (2002). 2. Moon. “The impact of country affiliation on the credibility of product attribute claims”. 170-81. Journal of Marketing. Vol. E. “The best global brands”. BusinessWeek. p. Fortune. pp. March 12.. “Asia to experience rise in users and revenues”. “A third of world’s net users from Asia Pacific”.A. W. V. 28-32. in Papadopoulos. August 6. “Information technology” Annual Report. Journal of Retailing. Forbes Global. Tavassoli. Vol. Internet Surveys. Doebele. D3. Vol. “China goes global”. The Economist. 75-91. June 24. and Nebenzahl. pp.ie/surveys. P. International Business Press. pp. D.com (accessed July 17). (2001). (The) Economist (2003). Spring. “WebQual: a Web site quality instrument”. “Where 3G is first-rate”. 64 No. (1993). BrandingAsia. (1996). The Wall Street Journal. and Samiee.ie/surveys Pan. pp. 2. Worcester Polytechnic Institute. September. 27 No. (1989a). 26 No. P. (2002). Vol.Bruton. April. Powell. 24 No. A.

He is currently on the Editorial Review Board of the International Marketing Review. Zhang. Vol. and Malhotra. Tanuja Singh. He was also named among the ten most prolific authors in international marketing during the 1987-93 period according to the ranking developed by the Journal of Teaching in International Business. and others. Allan Chan. Zhan G. including the Journal of the Academy of Marketing Science and Journal of International Business Studies. He is listed among the ten and the top 30 most prolific authors in the Journal of the Academy of Marketing Science and Journal of International Business Studies. David Luna. H. Hong Kong and China. Shashi Kaparthi. Ian Wilkinson. A. Imam Alam. Li. He is a Fellow of the Hong Kong Institute of Marketing and UK Chartered Institute of Marketing. Michael Czinkota. pp. Jae Pae. Zeithaml. California Management Review. Nicolas Papadopoulos. John Ford. 313-25. A. Kam Hong Lee. “Creating local brands in multilingual international markets. Nicole Coviello. Journal of the Academy of Marketing Science. Taiwan. Steven Chang. Abhik Roy. Vol. Matthew Myers. Howard Davies. His works have been published in the Journal of Consumer Research.M. Ramaseshan. Jyh-shen (George) Chiou.IMR 20. Raj Rajandran. Myung. B. Poh-Lin Yeoh. “Marketing strategy in emerging markets: the case of China”. Y. Tomasz Lenartowicz. Faculty of Business. Management International Review. S. (2003).Soo Jo. Attila Yaprak. and Schmitt. 11 No. Andy Grein. His current research interest includes “Multidimensional Trust in Buyer-Seller Relationship”. Sherriff Luk. “Xbox: its all about the games”. Namwoon Kim. and Entrepreneurship Theory and Practice. Vol. Journal of the Academy of Marketing Science. 97-106. B. His publications have appeared in Journal of Business Research. Tiger Li. “Service quality delivery through Web sites: a critical review of extant knowledge”. (2001). Insik Jeong. Ricky Chan. S. 38. Bruce Money. International Marketing Review among others. December. Susan Tai. Masaaki Kotabe. Paul Ellis. and “Internet’s Contribution to Supply Chain Management and Business Performance”. Veronica Wong. His publications have appeared in Journal of Marketing. Wildstrom. Paul Beamish. About the Guest Editors Paul Chao (PhD. He has extensive international teaching and research experiences having taught in Austria. International Business Studies. Don Lee. respectively. Peter Walters. Esther Tang. Abdi Eshghi. and Samiee. Journal of International Business Studies. Professor Samiee was identified as the third most published author in the Journal of Business Research for the 1985-1999 period. pp. University of Washington) is a Professor of Marketing at the University of Northern Iowa. BusinessWeek. Michael Hu. 362-75. Parasuraman. He is also the Project Director for the Institute of International Business Education.. Naidu. 4. S. Industrial Marketing Management. (2002). Pradeep Rau. Journal of Business Research. Joseph Yu and Yong Zhang . pp. P. He serves on the Editorial Review Boards of the leading journals in his areas of expertise. 30 No. Esra Gencturk. Journal of International Marketing.H. Wong. (2001).5 492 Walters. Special issue referees James Agarwal. Leslie Sai-Chung Yip is the Associate Professor and Head of Department of Business Studies. International Journal of Advertising. at the Hong Kong Polytechnic University. Bucha Reddy.” Journal of Marketing Research. Dana Lascu. Saeed Samiee is the Collins Professor of Marketing and International Business at the University of Tulsa. Mohan Pisharodi. Johny Johansson. In 2000. 1. Denmark. a joint project between the University of Tulsa and Moscow Institute of Electronics Technology. G. V.

The export market-oriented behavior – export performance relationship for these firms. Manchester. The purpose of the current study is to bridge this research gap. 2001). are significantly correlated with various dimensions of export success (Cadogan and Diamantopoulos. Cadogan et al. and the original studies did not systematically examine the export performance related consequences of EMO behaviors. International Marketing Review Vol.. 493-513 q MCB UP Limited 0265-1335 DOI 10. In particular. In particular. However.com/0265-1335.emeraldinsight. under conditions of low environmental turbulence. we extend previous export market orientation research by investigating whether the degree to which EMO behavior and export success are associated. we attempt to determine whether competitive intensity and technological turbulence in firms’ export markets are moderators of the EMO behavior – export performance relationship.. Using survey data obtained from Hong Kong based manufacturing exporters. Behaviour. was generally positive and strong. Specifically.emeraldinsight.htm Export market-oriented behavior and export performance The moderating roles of competitive intensity and technological turbulence John W. Aston University. Cui and Erik Kwok Yeung Li Manchester School of Management. However. 2003 pp. export market-oriented (EMO) behaviors. Cadogan Aston Business School. UK Keywords Export markets. Birmingham. 1998. it appears that this behavior is most important for exporters operating under conditions of high environmental turbulence. the costs of developing and implementing high levels of export market-oriented behavior may outweigh the benefits accrued. Previous studies have indicated that measures of firms’ market-oriented behaviors in their export operations. 5. 20 No. UK Export market-oriented behavior 493 Charles C. UMIST. As a result. our findings suggest that export market-oriented behaviors are important predictors of several dimensions of export performance. the exact nature of the relationship between firms’ levels of EMO behavior and export success.com/researchregister The current issue and full text archive of this journal is available at http://www. Introduction It has been suggested that one route to superior export performance is for firms to adopt a market orientation in their export activities (Cadogan et al. the latter findings were presented as part of the validation process for measures of export market orientation. is in need of clarification. 1999). Environmental regulations.1108/02651330310498753 . varies under differing environmental conditions.The Emerald Research Register for this journal is available at http://www. Hong Kong Abstract This study examines the issue of how export market-oriented behaviors influence export success.

the domain of market orientation encapsulates deeply cultural facets. a broad. We then outline the study’s theoretical background and formally state our hypotheses. What are EMO behaviors? Market orientation is usually defined as being the implementation of the marketing concept. only market-oriented behaviors directly influence performance: market-oriented values. outweigh the benefits accrued. and any performance influence these aspects of market orientation may have is indirect and through the firm’s actual activities (for additional arguments in support of this claim. We conclude with a discussion of the study’s significance. it is not known whether there are actually conditions under which the costs associated with increasing a firm’s level of EMO behavior. 1994) and managers need to be sure that their investments will reap suitable rewards. Similarly. as well as other psychologically endowed issues. 2000). marketing scholars do not know the conditions (if any) under which the benefits of EMO behavior outweigh the costs. Specifically. What does this mean? Although differences abound. norms and artifacts are considered to be antecedents to market-oriented behavior.5 494 The main benefit resulting from this research is that it will provide needed empirical grounding from which to make recommendations to export managers concerning important resource allocation decisions. Thus. 1996). pinpoint the research limitations and present several directions for future research. there are doubts as to whether increasing levels of EMO behavior is a good thing for all exporters. The methods chosen to provide evidence on our conceptual framework are described. 1998). stories. as things stand. In what follows. 1993). However. EMO behavior. we first define the key construct. Indeed. and the key findings highlighted. in fact. Given that it is likely that the costs associated with behaving in a market-oriented way in a firm’s export operations may be significantly higher than those associated with being market-oriented within a purely domestic setting. Specifically. recommendations to practitioners are plagued with uncertainty. such as market-oriented values and norms (Harris. rituals and arrangements (Homburg and Pflesser.IMR 20. . Homburg and Pflesser (2000) have argued that of the all the various sub-dimensions of market orientation. researchers are beginning to recognize that implementation means many things and that “market orientation” is. simply because the performance-related consequences of EMO behaviors have yet to receive rigoros empirical attention. the generation of information concerning the performance consequences of EMO behavior is timely. multi-dimensional concept. Yet. such as market-oriented artifacts. perhaps market orientation’s most critical manifestation is in the form of market-oriented behaviors (Jaworski and Kohli. see also Jaworski and Kohli. Increasing market orientation levels requires significant resource investments (Slater and Narver. all the time.

The focus of a firm’s EMO behavior is towards the firm’s export markets. 2002.. 2001. Do firms with higher levels of EMO behavior outperform their less export market-oriented counterparts? There are two perspectives on this question. the focus of this study is on the behavioral aspects of market orientation. and development and implementation of appropriate responses to the information (Narver and Slater. Rose and Shoham (2002) have conceptualized market orientation at the organizational level. researchers tend to agree on the core components of market-oriented behavior. The different components of EMO behavior are inter-related. on the other hand. 1990). we define a firm’s export performance as its degree of economic achievement in its export markets. not their behaviors in their domestic markets. but are qualitatively distinct. 2001). . Importantly. and drawing on Cadogan et al. for the most part.Thus. care must be taken when describing the level at which market orientation is being conceptualized. while recognizing that market orientation may differ across the firm’s domestic and export activities.’s (1999) definition. Kohli and Jaworski. and export market responsiveness is the design and implementation of strategies and tactics in response to changes occurring in the firm’s export markets. Export market-oriented behavior 495 The export performance consequences of EMO behaviors In this study. Therefore. this will not automatically be transferred into a high degree of market orientation in its export operations (Hooley and Newcomb. Fortunately. if a firm has a strong market orientation in its domestic markets. given the current study objectives. 1983. and other exogenous factors (such as technological and regulatory developments).. export intelligence dissemination concerns the formal and informal information exchanges which allow the information generated to reach appropriate export decision-makers. Export intelligence generation concerns the activities associated with generating information about the firm’s export customers’ current and future needs and wants. Cadogan et al. market-oriented behaviors comprise the generation of information about a firm’s markets. Rose and Shoham.. 1990. the degree to which activities are market-oriented in the domestic and export settings will differ (Cadogan et al. dissemination and responsive activities. the dissemination of this information to relevant decision-makers within the firm. competition in the firm’s export markets. Consequently. Cadogan et al. (1999). Indeed. Specifically. explicitly focused on analyzing firms’ market-oriented behaviors in their export operations. EMO behavior can be formally defined as consisting of export market intelligence generation. not its domestic markets. 2000). researchers are now beginning to recognize that it is possible for firms to have different levels of market orientation across their different business operations (Cadogan et al. Thus. it is likely that in many firms. Uncles. For instance. 2001).

scholars have argued that aspects of the environment may moderate the market orientation – performance relationship. Consequently. and that the rewards from being market-oriented may not always accrue (Jaworski and Kohli. p. As Dickinson et al.5 496 On the one hand. Cadogan and Diamantopoulos. if buyers are rational.IMR 20. given that its development and maintenance is highly resource intensive (Slater and Narver. the marketing concept suggests that firms should focus on the generation of information about their export customers’ needs and wants. in firms’ exporting operations. Looking at competition in firms’ exporting operations. 1993). and the provision of solutions to these in the form of goods and services. it can be argued that higher levels of EMO behavior should result in superior export performance. On the other hand. Specifically. behaving in a market-oriented fashion in export markets is more difficult and. relative to firms’ domestic operations. firms that do not . the resources required in the development and maintenance of EMO activities are significantly higher (e. The logic of Jaworski and Kohli’s (1993) argument can also be applied to the exporting context. that [they] will choose and come to prefer those firms whose market offerings best meets wants”. less-market-oriented firms are likely to see their performance impaired as customers switch to more market-oriented competitors. however. an organization may perform well. We focus on two such potential environmental moderators. we propose to test the following hypothesis: H1. and following this up with matching solutions. even if it is not very market-oriented. Indeed. seemingly as a truism. it is possible that a market orientation is not always desirable. (1986. Jaworski and Kohli (1993. as a result. although their research was not specific to firms’ EMO activities. it has been argued that.g. The better the firm is at identifying export customers’ real needs and wants. 1995. “it follows. Under more competitive conditions. and that firms may need to expend greater effort to develop their EMO behaviors in order to remain competitive (Kwon and Hu. Specifically. Consequently. because customers are “stuck” with the organization’s products and services”. 1994). the more successful the firm’s export operations should be. it seems likely that EMO behaviors will be most important under conditions of high competitive intensity in firms’ export markets. Kwon and Hu. competitive intensity and technological turbulence. there are also arguments to suggest that behaving in a market-oriented way in a firm’s foreign markets may not be beneficial for all exporters. p. Consequently. Thus. market orientation’s importance may be even more severely limited. 18) have noted. There is a positive relationship between exporters’ degree of market-oriented behavior in their export operations and their export success. 57) argued that a market orientation may be less important under conditions of low competitive intensity: “in the absence of competition. 2000). Here. 2000).

Here. and the delivery of those outputs to the end consumer” (Kohli and Jaworski. the market orientation and environmental turbulence scores reported in these studies are unlikely to reflect firms’ activities and experiences within their export operations. but measured market orientation as an organization-wide variable. 1995). “technology” is a broad term which encompasses “the entire process of transforming inputs to output. there is little by way of empirical evidence to shed light on this issue. measures of EMO behavior tend to correlate with measures of export performance (Cadogan and Diamantopoulos. will see export customers switching to more market-oriented competitors. and under conditions of high competitive intensity. p. it can be argued that for firms operating in technologically turbulent markets. competitive intensity was measured across the whole of the firms’ activities – not within the firms’ export markets. Other researchers have looked for moderator effects. for instance.is difficult to interpret. under conditions of low competitive intensity. no attempt was made to determine whether the competitive intensity in the export environment moderated the EMO behavior – export performance relationship. competitive intensity and export performance. However. The relationship between exporters’ levels of market-oriented behavior in their exporting activities and their export performance is moderated by the competitive intensity in the firms’ exporting environments: specifically. the costs associated with having high levels of EMO behavior. neither of these studies attempted to measure firm’s activities in their export operations. Cadogan et al. demonstrated that within the samples obtained. Furthermore. however. may outweigh the benefits accrued. the relationship becomes less negative. we propose to test the following hypothesis: H2. However. The fact that these studies failed to detect moderator effects with their measures of market orientation and competitive intensity. Unfortunately. Drawing on Kohli and Jaworski’s (1990) qualitative study findings. The second element of the export environment that we are interested in is technological turbulence. Kwon and Hu (2000) and Rose and Shoham (2002) looked at the relationships and interactions between measures of market orientation. 1998). the relationship is negative. 1990. is that the latter findings should not be used to conclude that the relationship between EMO behavior and export success is not moderated by firms’ export environments (Slater. However. as competitive intensity becomes more great. but have failed to measure market orientation and other important variables at the exporting level. 14). the relationship actually becomes positive and stronger.’s (1999) work. under conditions of low competitive intensity. For example.behave in a market-oriented in their export operations way. What is certain. Consequently. Consequently. channeling scarce resources into increasing market-oriented behavior levels Export market-oriented behavior 497 .

Our . we first contacted all the firms in the sample by telephone in order to determine eligibility and then elicit cooperation in the study. follow-up telephone calls were undertaken to increase the response rate.5 498 may be counterproductive. The sample included businesses from a wide range of industrial sectors. In the latter case. 2000).IMR 20. there are relatively few opportunities for changing the market structure or manipulating market behavior (Jaworski et al. Indeed. Of the 309 questionnaires mailed out. a total of 137 completed questionnaires were returned. the “competitive battleground often focuses on changing customers’ perceptions of the focal firm’s offerings versus the competitors’ offerings on attributes known to be considered important by customers” (Jaworski et al. In order to obtain the responses. toys and games.e. A week after the initial posting. as technological turbulence becomes greater. machinery. Two weeks after this. the firm had never exported. In total. The export manager in those firms agreeing to participate was mailed a questionnaire. 2000. including textiles and clothing. p. under conditions of low technological turbulence. The relationship between exporters’ levels of market-oriented behavior in their exporting activities and their export performance is moderated by the technological turbulence in the firms’ exporting environments: specifically. and a further 278 declined to participate. since these resource could be better invested in R&D or improving operations and production efficiency. Rather. (2000) have noted. 47)..g. we also argue the following hypothesis: H3. the positive relationship becomes progressively weaker. 213 firms were deemed ineligible (e. Thus. A random sample of 800 manufacturing firms with 50 or more employees was selected from the Hong Kong Trade and Development Council internet database system.. 137/587). electronics. Methodology Sampling issues We used a mail survey to generate data in order to test the hypotheses. they were saying that market-oriented behavior may not be as important as it is for firms operating in markets which are technologically stable. a follow-up telephone call was made to elicit reasons for non-response. and jewelry. as Jaworski et al. the firm was listed more than once). The point that Kohli and Jaworski (1990) were making was not that market orientation is not a good thing for firms operating in technologically turbulent markets. watches and clocks. together with a cover letter and pre-paid reply envelope. the success of firms operating in technologically turbulent markets often hinges on these firms’ ability to better deliver value to customers through more effective supply-side operations and cost management. corresponding to a response rate of 23 percent (i. pharmaceuticals. the relationship is strong and positive. the firm had stopped exporting. and consequently.

following the recommendations of Cavusgil and Zou (1994) and Matthyssens and Pauwels (1996). An additional item from Cadogan et al. we used Cadogan et al. and (2) the absolute average export sales turnover per export destination country. not changes taking place in firms’ domestic markets. Our “export sales efficiency performance” measure contained two items: (1) the absolute average export sales turnover per company employee. respondents were asked to indicate how profitable their export operations had been over the last financial year on a ten-point scale. from 1 ¼ poor to 10 ¼ outstanding. Measurement We used Cadogan et al. measured on a ten-point scale. a single item was used to capture “export profit performance”. export sales growth and export profits. Finally. we measured three aspects of firms’ economic achievement in their export markets: export sales efficiency.’s (1999) original scale was included in the responsiveness measure. export market intelligence dissemination and export market responsiveness. from 1 ¼ very unprofitable to 10 ¼ very profitable. Two dimensions of environmental turbulence were also included in the study. (1999) measures of EMO activities to capture the degree to which each firm behaves in a market-oriented way in its export operations.telephone analysis indicated that the two main reasons for non-participation and non-response were: (1) company policies restricting the giving of information to external parties. among others. Our “export growth performance” measure contained two items: (1) the absolute annual percentage growth in export sales over the previous three years. Finally. Export market-oriented behavior 499 . Specifically. and opportunities and threats arising from changes in the firm’s technological environment. Consequently. Specifically. (2001) modified the original instruments so they reflect changes taking place in firms’ export markets.’s (2001) adaptations of Jaworski and Kohli’s (1993) measures of competitive intensity and technological turbulence.[1] Incorporated in the instrument are items capturing firms’ levels of export market intelligence generation.’s (2001) shortened version of the Cadogan et al. Cadogan et al. the measures of export environmental turbulence capture aspects of change and unpredictability in competitive activities and competitive intensity. and (2) time constraints. and (2) the firm’s average annual export sales growth compared to the industry average.

10 . In preparation for the analysis. The third set contained the export performance measures. the composite reliabilities are all above the recommended threshold of 0.000 0.97 13.90). 1988). Overall. three procedures were undertaken.087 0. the latter’s error variance was set at [(1 .936 1.055 0.000 NNFI 0. the scales were analyzed in sets. and export market technological turbulence.44 (Bagozzi and Yi.024 0.f. 0. a: significant at p .5 500 Measurement assessment and construction In order to comment on the validity and reliability of the measures used. Measurement (set 3): export sales efficiency performance.984 0. export growth performance. all scales were examined with confirmatory factor analysis (CFA) using LISREL ¨ ¨ 8. As can be seen.000 GFI 0. The first set contained the three EMO behavior scales and three items were eliminated to ensure adequate model fit. The Appendix provides a complete listing of all items used for model testing. 1996).89 3. The final measurement results for the scales together with a correlation matrix are shown in Table II.317 CFI 0. GFI ¼ Goodness of fit index. where a ¼ scale reliability (and was assumed to be 0.03 3.026 0.a) £ s2].916 0. export profit performance. Analysis Model testing was undertaking using LISREL 8. Table I provides the measurement model fit indexes for each of the three CFA analyses.966 1.896 1. Model Measurement (set 1) Measurement (set 2) Measurement (set 3) Main effects Initial interaction-effects Final interaction-effects x2 (d. Furthermore. Measurement (set 2): export market competitive intensity.98 3.60 and the average variance extracted (AVE) scores are all above the recommended threshold of 0. Specifically. RMSEA¼Root mean square error of approximation. except for the competitive intensity measure. the results indicate that the scales perform well.03 (51) (8)a (5) (3) (3) (2) RMSEA 0. Fit measures for the models Notes: Measurement (set 1): export market intelligence generation. which returned an AVE of 0.955 0.990 1.30 (Joreskog and Sorbom.50. the fit indexes obtained for the measurement models were good.000 Table I.989 1.[2] The second set contained the two export environmental turbulence scales.998 0.990 0.90 0.IMR 20.010 0. the CFA fit indexes returned indicate that the specified measurement structures fit the data acceptably and that the scales are unidimensional. Since the “export profit performance” latent variable contained a single item only.990 0. In order to avoid violating minimum sample size to parameter ratios. and s ¼ item standard deviation.979 0.000 0.984 0.) 53. CFI ¼ Comparative fit index. NNFI ¼ Nonnormed fit index.30. dissemination and responsiveness.

13 0. Export growth performance 0.05 1.00 4.99 0.22 1. b sum of item scores (on a seven-point scale).84 0.77 0. Export market intelligence generation 4.50 0.70 0. Export market intelligence dissemination 5. na: composite reliability and average variance extracted are not applicable for the single item measure Export market-oriented behavior 501 Table II.34 1.11 0.22 0.44 0.64 0. c scale items were standardized prior to analysis and scale construction.03c 1.12 -0.13 0.09c 1.00 Notes: a average score across the items (on a seven-point scale).83 0. Export market competitive intensity 14.22 0. Export market responsiveness 5.21 0.00 7.78b 2.22 0.02 0.28 0.14 0.Constructs Mean Standard deviation 1 2 3 4 Composite reliability Average variance extracted 5 6 7 8 1.12 0.88 0.03 1.77 0.12 0.75 0.30 0.00 5.14 0.29 1.70 0.89 0. Export profit performance 0.12 0.14 na na -0.13 0.12 1. Export sales efficiency performance 0.94 0.06c 1.09 0.34a 0.77b 2. Measurement information and correlation matrix .65 0.00 2.55 0.59 0.27 0.73 0.72 0.02a 0.00 6.27 0.19 1. Export market technological turbulence 14.50 1.00 3.02 0.83 0.63a 0.00 8.

the EMO behavior and the two environmental latent variables were modeled as direct antecedents to all three export performance measures (the interaction terms were excluded from this main effects model). Using the error variance and factor loading estimates obtained in the main effects model. The fit for the initial interaction-effects model was acceptable. whereby single scores for “export sales efficiency performance” and “export growth performance” were computed. and the interaction latent variables were modeled as antecedents to the three performance latent variables. as can be seen in Table I. 2001). interaction terms were created. Second. As a result. In order to improve the model fit. in which the interaction terms were included.a) £ s2]. to reduce possible problems associated with multi-collinearity arising from the introduction of interaction terms in the structural model. Hypothesis testing procedures then followed Ping’s (1995) guidelines for the evaluation of structural models with interaction terms. Thus. using the mean-centered EMO behavior and the technological turbulence scores. Here. An initial interaction-effects model was then estimated. A similar process was undertaken for export environmental turbulence. a “technology interaction” term was created.90. The use of single indicants within interaction-based structural models to reduce model complexity has been recommended in the literature (e. together with Ping’s (1995) equations.. and the export market technological turbulence scale. Looking at Table I. the loadings and error variances of the interaction terms were calculated. Similarly. 1994). the latters’ estimated loadings and error variances were specified as constants in the model. 1996). However. it could be seen that the exclusion of a significant path from “export growth performance” to “export profit performance” explained the relatively low fit index. Third. a single score was obtained for EMO behavior by summing across the export market intelligence generation. a main effects only structural model was estimated first. the NNFI was below the recommended threshold value of 0. Here. 1999. whereby single scores were created for the competitor and technological environments respectively. Thus. the observed mean-centered EMO behavior score was multiplied by the mean-centered competitive intensity score. Specifically.IMR 20. and for export performance. an examination of the modification indexes was undertaken.g. single scores were created for each of the latent variables of interest. The resulting interaction term is simply referred to as the “competition interaction” term.5 502 First. were all mean-centered (Ping. dissemination and responsiveness scales (Cadogan et al. with the error variance of each latent variable’s indicator set at [(1 . the single indicants for the EMO behavior scale. it can be seen that the model fit the data well. The “export profit performance” measure was already measured using a single item. Given that the inclusion of this path in the model makes good sense from a theoretical . export market competitive intensity scale. Jaccard and Wan.

As a result of the above. the decrease in Chi-Square on moving from the initial interaction effects model to the final interaction effects model was significant at p ¼ 0.31. However. and Table III provides the standardized and unstandardized parameter estimates for the this model.05. it can also be seen that there is an indirect linkage between EMO behavior and export profit performance. Final interaction-effects model . p . Furthermore. 0. A diagramatic representation of the final interaction-effects model is shown in Figure 1. Results H1. As can be seen in Table I.05).90. since the path from growth to profits was also significant (b ¼ 0. only one of the three main effects from EMO behavior to the export performance measures was significant: EMO behavior was a significant predictor of export growth performance (g = 0.01). p . 0. the modified model was re-specified accordingly (NB: the inclusion of this path did not substantively alter the other path estimates).25. Positive relationship between EMO behavior and export success Looking at Table III. the findings provide clear support for the notion that EMO behavior is an important determinant of export success in terms of growth and profits. with all fit indexes showing substantial improvement.perspective. the final interaction-effects model returned excellent model fit. but did not predict export sales efficiency performance or export profit performance. it can be seen that H1 receives only partial support. and the NNFI returning a value well in excess of the recommended threshold of 0. Specifically. Export market-oriented behavior 503 Figure 1.

**: significant at p .06 0. 0. ***: significant at p .01 2 0.08 EMO behavior 20.01 (one-tailed).10 Export sales efficiency performance EMO behavior 20.06 Export growth performance 0.06 0.05 (one-tailed).30 0. 0.11 0.41 2 0.41* 0.08 0.05 Technology interaction term 2 0.07 Competition interaction term 2 0.52* 2 0.01 2 0.03 0.24 EMO behavior 0.25 Export profit performance 0.02 Competitive environment 0.25 Export growth performance 0. *: significant at p . .25 Notes: a Unstandardized path estimates are used for interpreting the results of structural models with interaction terms (Jaccard 1996).10 Technological environment 0.03 2 0.06 2 0.03 0.47 2.08** 2 0.64 0.02 2 0.06 Competitive environment 0. 0.31 Competitive environment 0.10 (one-tailed).19 1.89 1.92 2.78*** 2 1.08 Technological environment 0.14 Competition interaction term 0.11 Technology interaction term 0.03 0.36 Technology interaction term 20.64 2 0.89** 2.IMR 20.45 0.5 504 Dependent variables 0.01** and Wan.02 Competition interaction term 0.90*** 0.15 0.01 2 0. Table III. Unstandardizeda and standardized path estimates for the final structural model R2 Independent variables Unstandardized parameter estimates Standardized parameter estimates t-values 2 0.18 Technological environment 20.13 2.11 0.

an inflexion point value of 14.77 was returned.78. and the parameter estimate indicates that for firms operating in technological environments less turbulent than the inflexion value.01). Specifically. as technological environmental turbulence increased above the inflexion value. this finding was not repeated for either export growth performance or export profit performance.e. 0. This time.57.H2. the inflexion point occurred at a value of 13. for firms operating in technological environments that score less than the inflexion value. H3 was refuted since the technology interaction term returned a significant path coefficient (g ¼ 0. Only as competitive intensity increases above a value of 14. the relationship between EMO behavior and export sales efficiency is negative. This finding provides some support for the notion that EMO behavior is most important under turbulent competitive conditions in firms’ export operations. the relationship between EMO behavior and export sales efficiency performance was positive. Finally. for firms operating in environments where their competitive intensity score is less than the inflexion point. Only those firms operating in export markets which are more turbulent than the inflexion point returned a positive relationship between EMO behavior and export growth performance. p . Consequently. the inflexion point for the competition interaction term) is 14. no support was found for H3 when looking at the export profit performance measure. on a scale varying from 3 (very stable to) to 21 (extremely turbulent). Regarding export growth performance. Here. 0. and knowing that the competitive intensity scale could vary between 3 (very stable) and 21 (extremely turbulent). this finding provides support for H3. p . the technology interaction term also returned a significant co-efficient (g ¼ -0. Using the partial derivatives approach (Greenley.36. p . for export sales efficiency performance. the competition interaction term returned a significant path coefficient (g ¼ 0. since the technology interaction term returned a non-significant path coefficient.05). However. since the competition interaction terms were non-significant.25. the relationship between EMO behavior and export growth performance was negative. Export market-oriented behavior 505 . 0. 1995). However. Competitive intensity as moderator Some support was also provided in terms of H2. Technological intensity as moderator With export sales efficiency performance as dependent variable. the competitive export environment’s influence on the relationship between EMO behavior and export sales efficiency performance could be assessed. As a result.05). the relationship between EMO behavior and export sales efficiency performance was negative. H3. The result supports the notion that.78 does the relationship between EMO behavior and export sales efficiency become positive. This time. the value of the competitive intensity measure at which EMO behavior is estimated to have no relationship with export sales efficiency (i.25.

However. EMO Figure 2. Regarding the moderating effect of competitive intensity. EMO behavior was negatively related to export sales efficiency performance. when competitive conditions are less hostile. export sales per employee. from an efficiency-based perspective.IMR 20. sales efficiency decreases as EMO behavior levels decrease. since customers have little choice under these conditions. it can be concluded that EMO activity does not decrease the amount of effort required to bring about sales in export markets. increases in resource inputs are required to achieve and maintain high levels of EMO behavior). However. Looking at the main effects only. Thus. since the competition interaction term did not return a significant coefficient for either export growth or export profits. Figure 2 demonstrates this finding. EMO behavior was not associated with export sales efficiency performance. export sales per country exported to). However. indicating that EMO behaviors are a necessity under highly competitive conditions. a single effect was found in support of H2. the findings do not completely support H2. Given that the sales efficiency measure was based on “efficiency ratios” (i. Furthermore.e. exporters can perhaps get away with low levels of EMO behavior in order to sell their products. under conditions of low competitive intensity. This latter finding appears to indicate that. Indeed. EMO behaviors were strong predictors of export sales growth. and competition is weak.5 506 Discussion The findings from this study are interesting from a number of perspectives. Thus. it does appear to lead to increased sales per se. the returns accruing from having high levels of EMO behavior under low levels of competition are not as great as the returns accruing from having high levels of EMO behavior under high levels of competition. but positively associated with export sales efficiency performance under conditions of high competitive intensity. EMO activities require considerable resource inputs themselves. while behaving in an export market-oriented fashion in firms’ export operations might not lead to increases in the efficiency with which sales are made (i. higher levels of EMO behavior may actually represent an unnecessary drain on resources which reduces the efficiency with which sales are achieved. Findings for H2. EMO behaviors also have an indirect influence on export profit performance via export sales growth. Thus.e. and in line with Jaworski and Kohli’s (1993) reasoning. Competitive intensity . under conditions of high competitive rivalry in export markets.

Technological intensity . First. be able to match the firms’ marketing capabilities with the conditions facing the firm. However. This finding also makes sense since. identify new market opportunities. Findings for H3. while apparently reducing sales efficiency under conditions of low competitive intensity. do not appear to reduce actual sales growth. It can be argued that these findings are a function of the fact that EMO behaviors add a variable cost to the firms’ activities (e. sales growth is negatively related to EMO behavior under conditions of low technological turbulence and positively related to EMO behavior under conditions of high technological turbulence (Figure 3). firms are better positioned to: . and . refuting H3. This logic holds regardless of whether competition is weak or intense. and that this Export market-oriented behavior 507 Figure 3. or the total profits accruing from export sales. the findings with export sales efficiency performance appear to provide some support for H3. therefore. new product development. in that EMO behaviors were positively related to export sales efficiency performance under conditions of low technological turbulence. this result only pertains to the efficiency-based measures of export performance – not the sales growth measure. develop competitive strategies. etc. respond to changing customer needs and wants. rather than having a weak positive relationship. under conditions of high technological turbulence. EMO behavior was negatively related to sales efficiency performance (see Figure 3). . firms may find that market orientation becomes less beneficial.behaviors. developing and implementing new technologies. Here. The findings for the moderating effect of technological turbulence in firms’ export markets (H3) were a little more controversial. . At first glance.g.). this appears to reinforce Jaworski and Kohli’s (1993) contention that under conditions of high technological turbulence. Unexpectedly. by performing EMO behaviors.

EMO behavior appears to be able to stimulate customer demand. disseminate and respond to information about the technological environment. decreases. Hence. is likely to increase the efficiency of those activities (Ruekert et al. or by undertaking operation and production research. the types of market-oriented activities required of firms also become fairly predictable and formalized and this. product innovations. as the technological environment becomes more stable and less prone to change. Specifically. production. Conclusions and future research This study asked two key questions: (1) Does EMO behavior have a direct influence on export success? . under high levels of technological turbulence. EMO behavior is positively related to sales efficiency and negatively related to sales growth. Some direct effects from EMO behavior were observed. and the like (Jaworski et al. the need to generate. increased technological turbulence decreases the efficiency with which sales are achieved by market-oriented firms. as well as several non-linear effects. and become less important when changes occurring in the environment are limited. in a fairly predictable technological environment. By the same logic. the findings of this study provide strong support for the importance of EMO behaviors to export performance. high levels of EMO behavior appear to introduce an opportunity cost such that sales growth and profits are compromised. under conditions of technological stability. However. those firms wishing to improve their profits via increased export sales will need to ensure that their levels of EMO behaviors are sufficiently high.IMR 20. 1985). Overall. 2000).. new product designs.5 508 variable cost increases as a function of increased levels of technological turbulence. Possibly. such as research into reducing production costs. In short. by investing in more efficient distribution systems. under high levels of technological stability. What can be concluded is that the findings indicate that EMO behaviors are perhaps most important under conditions of high environmental turbulence. it is necessary for firms to accept these reduced efficiencies since. and is thus an important direct driver of sales growth. sales efficiency increases under conditions of low technological turbulence. Consequently. However. then. Consequently. some of those resources that help maintain EMO behavior levels could perhaps be better spent by investing in market driving activities. since export growth is an antecedent to export profits. These lower costs can be used to spur sales growth through reduced prices or by increasing value in other ways. identifying radically new technologies. more efficient distribution systems. In turn. For example. technological stability in the environment may actually reduce the variables costs associated with behaving in a market-oriented way in firms’ export markets.. in turn. operations and distribution costs can be lowered.

since sales growth and profits appeared to be negatively affected by higher investments in EMO activities in technologically turbulence markets: perhaps investments in other activities would be more beneficial for growth and profits. EMO behavior was also positively related to the efficiency with which sales are made. given the cross-sectional nature of the research. An important implication of this study for academics and export managers is that there are likely to be many export business contexts in which high levels of EMO behavior are critical. are facilitated by exporters’ levels of EMO behavior. 1998. Gray et al. approximately half of the current sample operated in technological and competitive business contexts where it seems that the costs of developing and maintaining EMO behavior may exceed the associated benefits (the term “costs” is a broad concept. it is a logical development from the empirical findings reported here.g. and finds support in a growing body of market orientation research undertaken within the non exporting literature (e. 1999).(2) Does the export environment moderate in some way the EMO behavior – export performance relationship? Our results have provided support for our hypotheses. Instead. 1998. However. Indeed. under conditions of low technological turbulence. These effects varied depending on the degree of turbulence in the technological environment. we cannot draw firm conclusions regarding causal linkages between variables.. Of course. Thus. EMO behavior may have a positive influence on export growth and sales under conditions of high technological turbulence. In general. the findings indicate that export sales growth and (indirectly) export profits. We can only compare the logic of the theoretical arguments with the patterns of association between variables. However. Greenley. the findings reported here must be interpreted in the light of the study’s limitations. While this conclusion may seem somewhat controversial. and includes financial expenditures and resource investments. our findings also suggest that academics should be aware that it is possible that higher levels of EMO behavior are not always necessary. Appiah-Adu. as well as opportunity costs). but the costs of EMO behavior may outweigh the benefits accrued when technological change is rare. Furthermore. Kumar et al. the payback from increasing levels of market orientation becomes greater when the competitive environment is more intense. a direct affect from EMO behavior to export sales growth was observed. 1995.. The findings also seem to demonstrate that an efficiency based measure of export sales efficiency performance was not directly influenced by EMO behavior. increased efficiency appears to come at a price. and moderator effects were also returned for both competitive intensity and technological turbulence. First. A Export market-oriented behavior 509 . it appears that firms with high levels of EMO behaviors have higher levels of export sales per employee and export sales per export destination country under conditions of high competitive intensity.

particularly in light of the recently advocated market-oriented culture perspective of the firm (Harris. leaving a three-item measure. what are the performance implications for firms with different profiles of market orientation across their business portfolios. 2000)? Perhaps. Two items were eliminated from the generation scale. For example. most importantly. do EMO behaviors influence the success of firm’s adaptation or standardization strategies[3]? There is also a need to understand how firms’ market orientation behaviors in both their export markets and domestic markets. Finally. Homburg and Pflesser. should market orientation be viewed as a set of activities that can and do vary market-by-market (Uncles. and are there any heuristics which can be identified to help businesses organize their market-oriented behaviors in the most appropriate way? Notes 1. as well as factors internal to the firm (such as co-ordination capabilities. political acceptance of exporting. In response to a reviewer’s question. 1998. or should they be attempting to have consistent levels of market-oriented behavior in all their activities? Clearly. multi-country studies are also warranted. future researchers may find it productive to investigate whether there are other important moderators of the EMO behavior – export performance relationship. and one item was eliminated from the responsiveness scale. We thank an anonymous reviewer for suggesting this line of research. Why do some firms fail to carry the market orientation they have develop in the domestic context into their exporting operations? Are these firms behaving in a rational way. answers to issues such as these may have important resource allocation implications. investigators could examine market orientation in a more fine-grained way. 2000)? If market-oriented behavior does vary on a market-by-market basis. how can such differences be explained. 2. In order to explore whether country of origin effects play a role in determining the effects observed in this study. One avenue of research to pursue in this context is to determine whether EMO behaviors influence the success of the firm’s chosen strategies in their export markets. interact. . The study also used a sample of exporting companies based in Hong Kong.5 510 longitudinal study to explore the issues raised in this paper would provide more conclusive evidence in this respect. leaving a four-item measure. export dependence or organizational structure issues). 3. we used Cadogan et al. For instance. There are also several directions for future research which may prove fruitful. Examples could include factors external to the firm (such as changing socioeconomic factors within export destination countries or the latters’ degree of political instability).’s (2001) measure because there are currently no valid alternative measures available of firms’ market-oriented behaviors in their export operations. For example. It is also the case that EMO behaviors may influence non-economic as well as economic performance.IMR 20.

(1996). pp.. research propositions. 1. Kohli. Harris. Vol. 74-94. (1995). K.W.. D.K. “Narver and Slater. Hooley. 16 No.K. and Diamantopoulos. Export market-oriented behavior 511 . Vol. and Kohli. J. and Newcomb. 449-62. and Pflesser. 1 No. 45-54. Journal of Strategic Marketing.E. The Strategy and Organization of International Business. “Cultural domination: the key to market-oriented culture?”. S. Thousand Oaks. 1-18. Vol. causes and cures”. Chicago. (1996).P. European Journal of Marketing. Paul. and O’Shaughnessy.K. LISREL 8: User’s Reference Guide. C. and Sundqvist. A. 1-21. Puumalainen. B.. Vol..References Appiah-Adu. Journal of Marketing. Vol.. Cadogan. 354-73. and managerial implications”. Greenley. Journal of International Business Studies. A. and Diamantopoulos. Burton.J. B. L.R. Vol. pp. 2. P. 689-707. “Developing a measure of export market orientation: scale construction and cross-cultural validation”. B. (1990). Y. “Market orientation: antecedents and consequences”. Jaworski. A. S.J.. Cadogan. 1. (1995). Vol. 10. S. “Ailing British exports: symptoms.C.. Vol. R. 1-13. J.J. Vol. IL. Vol. K. Salminen. 57. R. (1996).K. A. (2000). (1998). 53-70. Herbst. and Sorbom. Journal of Marketing Research. 32 No. “Thriving on turbulence”. 1. C. Jaworski. Kohli. 231-57. pp.E. A. 15-22. in Buckley. B. 54. January. pp. pp. “Marketing strategy-performance relationship: an investigation of the empirical link in export market ventures”. pp. C. and Matheson. 18 No. B. roadmap”. G. and Kohli.P. H. (1988). R. A. 75-88. Gray. “Market-driven versus driving markets”. 6 No. 3. 25-45. 3/4.W. (1993).J. “A multiple-layer model of market-oriented organizational culture: measurement issues and performance outcomes”. (1998). pp. Diamantopoulos. European Journal of Marketing. (1986). “Market orientation: review. and Yi. 6. LISREL Approaches to Interaction Effects in Multiple Regression. (Eds).J. C. Cadogan. 8 No. F. 41-60. Bagozzi.K. S. (2000). “Measuring market orientation in an export context: some preliminary evidence”.J. “Market orientation: the construct. Journal of the Academy of Marketing Science. Vol. and Mirza. Vol. J. “On the evaluation of structural equations models”. J. pp.K.W.. Journal of Marketing.T. 261-82. P. April. (1994). G. (2001). Journal of the Academy of Marketing Science. Dickinson. 56. and Zou. 119-35. London. 4. and de Mortanges. The Quarterly Review of Marketing. International Journal of Research in Marketing. Macmillan. Journal of Market Focused Management. Vol. Journal of Marketing. 20 No. and Wan. Cadogan. “Market orientation and company performance: empirical evidence from UK companies”. July.W. “Market orientation and performance: empirical tests in a transition economy”. J.T. A. Vol. (1998). Winter. pp. A. Cavusgil.. J. pp. 18-23. Matear. Journal of Strategic Marketing. 4 No. pp. Scientific Software International. and Jaworski.M. (1999). ¨ ¨ Joreskog. (1983). Journal of Market Focused Management. Homburg. Vol. “Marketing concept and customer orientation”. pp. G. and Sahay. (1999). Jaccard. 28. “Key antecedents to ‘export’ market-oriented behaviors: a cross-national empirical examination”. K. Vol. pp. A. Greenley. pp. refinement. CA. 3. pp. Kohli and Jaworski and the market orientation construct: integration and internationalization”. 4.J. J. 30 No. N. Sage. 37 November. pp. pp. British Journal of Management. Jaworski. 3 No.

336-47. Vol.g.C. Vol. 55 No. pp. (3) Important information about our export customers is often “lost in the system”R. 364-71. (1996). J. technology). pp. Vol. R..g.Y. O. Matthyssens. K. January. (2000). P. “Does competitive environment moderate the market orientation-performance relationship?”. 61-75. R. political. J. pp. “The organization of marketing activities: a contingency theory of structure and performance”. (1990). 813-29. we generate a lot of information concerning trends (e. Australian Journal of Management. Journal of Marketing. and Dau. Slater. and Slater. (1985). (1998). 46-55. P.5 512 Kumar. Winter. C. (1995). pp. M. 217-25. pp. Journal of Management. Ping. and Narver. 8. 22 No. 24 No. 49. Vol. K. R. Vol. pp. Vol.F. Vol. pp. Scale items Export market intelligence generation (seven-point scale with very strongly disagree/very strongly agree anchors). Ping.IMR 20. pp. A. “Market orientation among small Korean exporters”. “Does satisfaction moderate the association between alternative attractiveness and exit intention in a marketing channel”. Y. 13-25. Rose.F. regulations. and Yauger. (3) We generate a lot of information in order to understand the forces which influence our overseas customers’ needs and preferences. European Journal of Marketing. “The effect of market orientation on business profitability”. “A parsimonious estimation technique for interaction and quadratic latent variables”. 20-35. (1) Too much information concerning our export competitors is discarded before it reaches decision makersR. Jr. (1994). 3. and Shoham. and Pauwels.C. 2. Subramanian.A. “Export performance and market orientation: establishing an empirical link”.J. 32 August. R. 58. Uncles. Journal of Marketing Research. 201-33. i-ix. 9. “Export performance: success determinants for New Zealand manufacturing exporters”.C. technological developments. 9/10.C. (2002). M.W. economic) in our export markets. S. International Business Review. Vol. Kwon. 85-114. and Hu. (2) Information which can influence the way we serve our export customers takes forever to reach export personnelR. 4. (1995). pp. . Journal of Strategic Marketing. Jr. Vol.F. 2. Slater. and Roering. P. pp. S.M. (1) In this company. (1998). pp. “Assessing export performance measurement”. 32 No. Further reading Thirkell. Export market intelligence dissemination (seven-point scale with very strongly disagree/very strongly agree anchors). Vol. pp.A. (2000). (1994). Journal of Business Research. 25 No. regulation. Walker. “Examining the market-orientation performance relationship: a context specific study”.C. Vol. October. S. Appendix. 257-70. Advances in International Marketing. Jr. Journal of Marketing. Journal of Marketing. (2) We periodically review the likely effect of changes in our export environment (e. Vol.. 3. “Issues in conducting marketing strategy research”. “Market orientation”. Ruekert. G. R. 54. Narver. Journal of the Academy of Marketing Science.

(2) One hears of a new competitive move in our export markets almost every day. (1) Over the last three years. (1) If a major competitor were to launch an intensive campaign targeted at our foreign customers. Export market-oriented behavior 513 . . how profitable has exporting been over the last financial year? (10-point scale with very unprofitable/very profitable anchors). (2) How does your average annual export sales growth/decline compare to the industry average? (10-point scale with poor/outstanding anchors). regulation. (1) In our export markets. (4) We rapidly respond to competitive actions that threaten us in our export markets.(4) Information about our export competitors’ activities often reaches relevant personnel too late to be of any useR. (1) Overall. Export sales efficiency performance. . economy). Export profit performance. aggressive selling is the norm. (3) We are quick to respond to important changes in our export business environment (e. technology) is often discarded as it makes its way along the communication chainR. (1) The technology in our industry is changing rapidly. Competitive turbulence in the firm’s export markets (seven-point scale with not at all/to an extreme extent anchors). Technological turbulence in firm’s export markets (seven-point scale with not at all/to an extreme extent anchors). (2) Technological changes provide big opportunities in our industry. Export market responsiveness (seven-point scale with very strongly disagree/very strongly agree anchors). (3) In our foreign markets. (5) Important information concerning export market trends (regulation.g. we would implement a response immediately. Export sales growth performance. (2) Export sales per country exported to (the ratio of the firm’s total annual export sales to the total number of countries the firm exports to). technology. (3) A large number of new product ideas have been made possible through technological breakthroughs in our industry. average annual percentage growth/decline in export sales (a percentage score). Note: R reverse coded. there are many “promotion wars”. Regarding the impact of technology in your export business. (2) We are quick to respond to significant changes in our competitors’ price structures in foreign markets. (1) Export sales per company employee (the ratio of the firm’s total annual export sales to the total number of company employees).

Company performance. certain capabilities will be more important to certain strategic types. Empirically tests. Temple University.com/0265-1335. defined as “complex bundles of skills and accumulated knowledge . Barney. that enable firms to coordinate activities and make use of their assets” (Day. a clear understanding of the enterprise’s specific capabilities and advantages is required in order to achieve sustained competitive advantage. and Chinese enterprise managers become more responsible for their own strategic decision making. that is. Specifically. 38). a firm possessing a given strategy tends to develop capabilities that help it to pursue its strategies and attain long-term competitive advantage. 1994). Philadelphia. Anthony Di Benedetto Fox School of Business and Management.emeraldinsight. 1990. . 1987). . capabilities determine strategy.htm IMR 20. Concludes by discussing managerial implications. and finds support for. 514-533 q MCB UP Limited 0265-1335 DOI 10. which include both assets and capabilities. China. Understanding the Chinese business environment is of importance to businesses around the world as the Chinese economy undergoes rapid expansion and decentralization of strategic decision making to the level of the state-owned enterprise.emeraldinsight. 1984. Day. 5. University of Washington. proposes that prospectors have greater relative inside-out capabilities and information technology capabilities. 2003 pp. At the same time. Seattle. 20 No. 1991. Capabilities are typically extremely difficult to imitate since they are deeply rooted in the firm’s routines and practices (Dierckx and Cool.5 514 The relationship between strategic type and firm capabilities in Chinese firms C. p. 1992. the propositions using a data set of 245 Chinese firms. Strategic management. Pennsylvania. USA. International Marketing Review Vol. and Michael Song School of Business Administration. and strategy determines The authors wish to thank the reviewers who provided valuable and insightful comments on an earlier draft of this article. and it is the task of management to determine how best to exploit and improve these resources (Mahoney and Pandian. . Wernerfelt.1108/02651330310498762 Introduction Recent studies in the marketing and strategy literature have examined firms’ capabilities. Decision making Abstract Proposes that firms of different Miles and Snow strategic types will have different bundles of firm-level capabilities. are the source of the firm’s long-term competitive advantage and performance. Washington.The Emerald Research Register for this journal is available at http://www. That is. USA Keywords Strategic choices. comprised mostly of state-owned enterprises. As the central government takes on a lesser role in the management of enterprises. Firm-specific resources.com/researchregister The current issue and full text archive of this journal is available at http://www. while defenders have greater relative outside-in capabilities and marketing capabilities.

1991). (1990) empirically tested the relationship between marketing capabilities and the Miles-Snow strategic typology. . 7). and raw material flows” (Barnathan et al. Day and Wensley. including “inside-out”. Capabilities in marketing and information technology are also related to firm performance. and reactors) and firm-level capabilities (Miles and Snow. while open to conflicting interpretation. analyzers. Except for Conant et al. 1983. marketing and information technology capabilities (Day. . Jaworski and Kohli. reduce costs. China is currently experiencing substantial economic expansion. Also. investment. distinctive competencies. recent Department of Commerce reports show that the US trade deficit with China is greater than that with Japan (Borrus and Engardio. The marketing strategy literature suggests that several capabilities are critical to success. Managerial reforms initiated in the mid-1970s were designed to stimulate growth in the Chinese economy. and the firm’s ability to sustain competitive advantage (Conant et al. while others will be relatively more important to those that behave as defenders. defenders tend to want to continue defending” (Hambrick. and increase competitiveness.. defenders. China represented about a quarter of the world’s population and had a trade surplus with the US of about $35 billion. we propose that some of these capabilities will be relatively more important to firms that behave as prospectors. 1988). 1993. Inside-out capabilities permit the organization to improve production process efficiencies. Barnathan. Day. Such statistics. a combination of administrative and party authority (Schermerhorn and Nyaw. and strategic selection have not been empirically tested. 1993). Many Chinese firms are state-owned enterprises (SOEs). . In addition. Conant et al. we test our proposed relationships in the Chinese business environment context. Fortune described the growth of the economy of Guangdong province as “a stunning accomplishment unmatched by Japan [and other Asian economies] during similar stages of development” (Worthy. “outside-in”. p. The research objective of this study is to investigate the relationships between strategic type (as measured by the Miles-Snow strategic typology of prospectors.. including a focus Strategic type and firm capabilities 515 . 1996). By the mid-1990s. 1992). 1990. characterized by parallel power structures. p. 1993.in the world . . the relationships between firm capabilities. the New York Times characterized the Chinese economy as “the second largest . Business Week noted that China’s economy was growing at a rate well above 10 percent per year. 1990.’s (1990) study. suggest that China could overtake the USA as the biggest economy in another decade or so” (Kristof. and that the emergence of this economy was sure to “affect global trade. This apparent circularity was perhaps best expressed by Hambrick: “prospectors tend to want to continue prospecting. 1978). In the early 1990s. 1995. however. 1).capabilities. Specifically. Outside-in capabilities such as purchasing and new product development allow the organization to exploit marketplace opportunities. 1994. 1994).

Our empirical results largely support the conceptual work described above. 1994).5 516 on technology and innovation to increase competitiveness. investment. it is unclear whether their findings are generalizable to the Chinese business environment and Chinese decision makers. The above-mentioned theoretical studies on firm capabilities assume capitalistic. We conclude by providing prescriptions for practicing managers in Chinese SOEs seeking to improve their firm’s process of strategy selection and capability development. such as urban. Henley and Nyaw. 1987). while the SOE typically has some latitude in setting outputs. Despite the important. We use the Miles-Snow typology to operationalize strategic type. 1994). and performance targets. few studies have systematically investigated Chinese companies and their competitive strategies (Song and Parry. outside-in. 1991. are supervised by lower levels of government and less subject to central government control. growing role of SOEs in the emerging Chinese economy and the increasing importance of China in the global marketplace. That is. prices. Theoretical framework The Miles-Snow strategic typology The Miles and Snow (1978) strategic typology has received much attention and investigation in the marketing and management literature over the last two . Later reforms were intended to give the SOE greater latitude in strategic decision making. Although the reforms have been adopted slowly. some decentralization has been observed. as well as employee compensation and discipline. We develop several propositions relating four distinct firm capabilities (inside-out. labor. Western market conditions. 1986). As the Chinese economy moves toward a more decentralized form with less government involvement in planning and strategy.IMR 20. or village collectives. and gather data from 245 managers of Chinese firms (mostly SOEs). Other types of Chinese enterprises. as are small private companies (Parry and Song. Parry and Song. The central authority is commonly involved in management hiring. 1994. and making product-mix and input decisions (Schermerhorn and Nyaw. and information technology) to the firm’s strategic choices. township. SOE decision-makers will increasingly be accountable for choosing advantageous competitive strategies in keeping with their firms’ distinctive capabilities. and conduct an empirical study in the Chinese business environment in which we empirically test our propositions. Child. marketing. 1988. To our knowledge there are no published empirical studies of the process by which managers of Chinese firms make and support strategic competitive decisions. and initiated profit sharing between the SOE and the state (Laaksonen. we find evidence that the theoretical model we build from principles derived from the Western business environment appears to be generalizable to the Chinese business environment.

Defenders are usually not at the forefront of new product development in their industries. Prospectors. The critical underlying variable in this typology is the organization’s rate of change in its products or markets. Analyzers maintain a stable. 1997). Shortell and Zajac. . often ignoring industry changes not directly related to their operations. Ruekert and Walker. Prospectors value being a first mover. analyzers will prefer a “second-but-better” strategy. Firms that make fewer and slower product-market changes than prospectors. Reactors.decades (e. typically lack long-term plans. Analyzers. protecting their domain instead by offering lower prices. defenders and reactors). Strategic type and firm capabilities 517 . 1990. and suggested that first three types (the “archetypal” types) choose different competitive strategies with respect to products and/or markets. Seldom a first mover. for example. higher quality. Rajaratnam and Chonko. 1986. but the firm or SBU must understand its distinctive competencies and capabilities in order to choose and implement its strategic type correctly. limited line of products or services. (2003) as follows: . 1990. Dyer. Hitt and Ireland. and these responses often lead to competitive action. Defenders. Defenders offer a limited range of products. . Miles and Snow (1978) proposed four strategic types (prospectors. Firms that operate within a broad. 1987). analyzers. 1995. In short. or better service than competitors.. analyzers often act as a second or third entrant in product-markets related to their existing market base. all three “archetypal” strategic types can be desirable. Prospectors generally compete by stimulating and meeting new market opportunities. Firms that attempt to locate and maintain a secure position in relatively stable product or service areas. periodically redefined product-market domain. by contrast. Miles and Snow envisioned strategy as a pattern in a firm’s (or SBU’s) decisions. carefully following a selected set of promising new developments. though they may not sustain their strong position through time in all markets they enter. Detailed definitions of each strategic type are presented below: (1) Strategic types (Walker et al. Their typology categorize firms according to the enduring patterns of strategic behavior by which they achieve this alignment with the environment (McDaniel and Kolari. 1987. Conant et al. and defenders will focus on maintaining their current position in their product markets. McDaniel and Kolari.. but are less committed to stability and efficiency than defenders.g. are more likely to be technologically innovative with their products and/or to seek out new markets. by which the firm aligns itself with its environment. 1987. Prospectors. responding rapidly to early signals of opportunity.

This category includes having systems in place for facilitating cross-functional integration. prospectors will focus on developing capabilities that sustain their competitive position as prospectors. This category includes market sensing. Those that allow the firm to take advantage of inside-out and outside-in capabilities by implementing effective marketing programs. Allow the firm to be more effective in exploiting its inside-out capabilities. (2) Capabilities (Day. Those that allow the firm to keep costs down and/or differentiate its offerings from competitive offerings. pricing. Amit and Schoemaker. 1988) as follows: . the objective of this study is to determine whether certain firm-level capabilities will be relatively more important to certain strategic types in the Chinese business environment. 1994. in this business environment. targeting. and logistics. 1994). That is. . Reactors respond primarily when forced to by environmental pressures. Day and Wensley. Information technology capabilities. . 518 Reactors. Those that bring key information into the firm and allow it to be more responsive to changes in customer needs. Reactors are generally not willing to assume the risks of new product or market development. 1990. and technology monitoring. Day. As noted earlier. Organizational capabilities An organization requires a wide range of capabilities in many areas to enable it to create economic value. and technology and market knowledge creation. capabilities allow the firm to sustain its competitive advantage through time and to achieve superior profitability (Reed and De Fillippi. Inside-out capabilities. customer linking. This category includes financial management. Marketing capabilities. nor are they as aggressive in marketing established products. and they are not easily copied by competitors. internal communication. channel linking.5 . Firms that lack any well-defined competitive strategy and do not have as consistent a product-market orientation as the competition. 1993. This category includes skill in segmentation. 1990. Capabilities are generally scarce (different firms in an industry will not all have the same capabilities). technology development. For these reasons. cost control. . and advertising. they are relatively immobile (they are more useful to the firm that has them than to others). Those that allow the firm to diffuse market information effectively across all relevant functional areas and direct its new product development efforts more effectively.IMR 20. and defenders will focus on . Outside-in capabilities.

technology and new product development. forging durable links with customers. channel and customer linking. Outside-in capabilities such as market sensing. 1994. technology development.. We focus instead on four categories of capabilities that have been identified in the marketing and management literature as being critically linked to the development and sustainability of competitive advantage and long-term competitive success (Day. Analyzers. as it can sense marketplace requirements before competitors. 1990. sharing characteristics of both prospectors and defenders. Outside-in capabilities are less critical to the success of prospectors. We do not attempt to provide an exhaustive list of all possible capabilities an organization might have. Conant et al. and technology monitoring. and creating strong bonds with channel members. who. 1994). technology change forecasting. While it is true that all organizations should possess good outside-in capabilities. Day and Wensley. and connect the organization’s other capabilities to the external environment (Day. These have been more fully defined earlier. and production facilities. 1988. so for their very survival it is crucial to have excellent market sensing and linking (outside-in) capabilities (Conant et al. 1994). Inside-out capabilities such as financial management.. 1990. outside-in. and logistics allow an organization to keep costs down and/or to differentiate its offerings from those of competitors. Day. cost control. or market sensing and linking capabilities are those that allow the organization to compete by sensing market changes and shifts in the market environment. inside-out capabilities include capabilities in manufacturing process. as well as the ability to forecast technological change in the industry (Walker et al.developing capabilities that sustain their competitive position as defenders. Marketing capabilities such as skill in segmentation. Jaworski and Kohli. 1993). bring key information into the organization and allows it to be more responsive to changing customer needs. 1990). pricing and advertising permits the organization to take advantage of its market sensing and technological capabilities and to implement effective marketing programs. will be midway between prospectors and defenders in their importances of firm-level capabilities. Finally. These capabilities enable the organization to compete effectively. targeting.. By contrast. according to the previous definition. 2003. 1994). information technology capabilities permit the organization to effectively diffuse market information across all relevant functional areas so that it can direct new product development efforts. defenders (as defined earlier) owe their competitive existence to their ability to defend their familiar products and markets. Outside-in capabilities allow the organization to use their inside-out capabilities effectively to exploit external possibilities (Day. Proposition development As shown previously. would Strategic type and firm capabilities 519 .

along the prospectors-analyzers-defenders continuum. however. Prospectors will have the lowest relative marketing capabilities and defenders the greatest. Griffin and Hauser. or developing new products that can be sold to new or existing markets. these capabilities will be of utmost importance to defenders in sustaining competitive advantage. Thus.IMR 20. effectiveness of advertising and pricing programs. 1996. Bharadwaj et al. Marketing capabilities include knowledge of competition and of customers. 1994. while outside-in capabilities are important for prospectors. While important to all organizations. with analyzers falling in between on both scales. while outside-in capabilities are relatively more important to defenders. Moenaert and Souder. 1999). 1987). the abilities to forecast technological change and develop new products (typical inside-out capabilities) are what allow prospectors to keep on prospecting and stay competitive. Better information technology improves communication across functional areas in the organization. Prospectors will have the greatest relative inside-out capabilities and defenders the lowest. and include them in our analysis section. We are primarily interested in the relative capabilities found in the three archetypal strategic types. 1992). P4. 1990). inside-out capabilities are relatively more important to prospectors. so our propositions do not explicitly include reactors. and ultimately leads to greater new product success (Day.. and marketing activity integration (Conant et al. prospectors rely more greatly on proactive new product development (Robinson et al. Prospectors will have the lowest relative outside-in capabilities and defenders the greatest. on a relative scale. 1990... We propose: P3. which requires that information is effectively gathered from the marketplace and disseminated throughout the organization (Kohli and Jaworski. along the prospectors-analyzers-defenders continuum. . since they are most concerned about protecting current products and customers (McDaniel and Kolari. 1986. Prospectors will have the greatest relative information technology capabilities and defenders the lowest. increases strategic flexibility. We will gather data from reactor organizations. 1993). skill in segmenting and targeting markets. Jaworski and Kohli. 1993. Gupta et al. Thus. We propose: P1. 1992.. along the prospectors-analyzers-defenders continuum. along the prospectors-analyzers-defenders continuum. P2. By contrast.5 520 respond to the same challenge by seeking out new markets to serve.

we sent a one-page survey and an introductory letter to the president of the company requesting participation to all of the selected firms. our field research also suggests that 11-point scales (0 for much worse than our competitors. We collected data on strategic types from 352 Chinese firms (representing a response rate of about 44 percent).. 1994 and Conant et al. machinery.500 employees. the capability questionnaire (designed to collect data on the four capabilities) was sent to the SBU managers. 1990) and based on our preliminary field research with Chinese managers. We employed a three-wave mailing based on the recommendations of Dillman (1978).g. together with personalized letters. Parry and Song. and information technology). collecting data on SBU strategies. The final sample includes the following industries: computer related products. air-conditioning. 1994). We collected data on four capabilities from 245 Chinese firms. pharmaceuticals. Song and Parry. electric equipment and household appliances. Two items at the end of the instrument assessed respondents’ confidence in their ability to answer the questions. In the first stage. The majority of the SBUs/divisions had annual sales between $11 million and $750 million and had between 100 to 12. Directory of Corporate Affiliations. instruments and related products. was mailed to each manager. The individuals with a low level of confidence (less than six) were excluded from the sample. 10 for much better Strategic type and firm capabilities 521 . Each firm was asked to select an SBU/division for participation and provide a contact person in the SBU/division. marketing. The data collection has three steps: presurvey. In the third stage. chemicals and related products. In the second stage the designated SBU managers were contacted directly by the researchers and a questionnaire designed to collect data on strategic types. These scale items were grouped theoretically into four categories corresponding to the firm capabilities (outside-in. Measures A set of 36 capability scale items were generated based on our review of the literature (primarily Day. The same process in the second phase was followed. using 0-10 scales. inside-out. Consistent with earlier studies (e. and transportation equipment. and collecting data on relative capabilities. telecommunications equipment. drugs and medicines.Data The sampling frame consisted of a random sample of 800 Chinese firms (almost all SOEs) listed in Ward’s Business Directory. 414 agreed to participate and provided the necessary contacts. electronics. We also offered a list of available research reports to the participating firms. The data on strategic types used in this study are from this second phase while the data on four capabilities are from the third phase. Respondents were required to rate their SBU on each of the capability scale items relative to their major competitors. and the World Marketing Directory. Out of the 800 firms. 1994.

Factor loadings are reported in Table I.IMR 20. we developed a set of information technology capability scale items. Information technology capabilities are defined as those that help an organization create technical and market knowledge. marketing. and information technology) were 0. and new product development capabilities. cost reduction.949. of which five items were ultimately retained. Inside-out capabilities are defined as those related to greater efficiencies. and greater competitiveness. From Day’s (1994) set of inside-out capabilities. the ability to predict technological change. on a 0-10 scale. Based on our field studies with managers. The construct reliabilities all exceeded the 0. Construct reliabilities measured by Cronbach’s alpha for the four capabilities measures (outside-in. 0. the ability to retain customers. channel-bonding capabilities (creating durable relationships with channel members).40. and to facilitate intra-organizational communication flow. We retained variables with factor loadings exceeding 0. production facilities. integration of marketing activities. (1990) study of marketing capability and strategic type. and are consistent with the four categories of capabilities theoretically expected as described above. skills in segmentation and targeting. knowledge of competitors. The final scale had five items drawn from Day’s (1994) set of market sensing and linking capabilities. relative to competitors. Marketing capabilities are measured using a six-item scale drawn from the Conant et al. and 0.795. Managers were asked to rate their SBU on each of these capabilities. effectiveness of pricing programs. Examination of the diagonal of the factor score covariance matrix (SMCs) indicates that all factors are internally consistent and well defined by the measurement items. inside-out. perhaps because of their structural similarities to the metric system. Outside-in capabilities are defined as market sensing and linking capabilities that are focused outside the organization. All factors are distinguishable and well defined. This procedure produced four factors and reduced the total number of variables to 21. and market sensing capabilities. capability to create durable relationships with suppliers. technology development capabilities.813. and effectiveness of advertising programs.825. Our experience with cross-national surveys suggests that 0-10 scales are better understood across multiple nations than are the 1-7 or 1-6 scales more commonly seen in North American research. consistency in delivery. we ultimately generated a five-item scale measuring: manufacturing processes.5 522 than our competitors) are more appropriate for eliciting levels of agreement. These included the possession of information technology systems for new product development. We performed principal factor analysis with varimax rotation on the 36 capability variables. cross-functional .70 level recommended by Peter (1979). These measured the firm’s customer-linking capabilities (creating and managing durable customer relationships). 0. These include: knowledge of customers.

creating and managing durablecustomer relationships) capabilities Capabilities of creating durable relationships with our suppliers Ability to retain customers Channel-bonding capabilities (creating durable relationships with channel members such as wholesalers. and internal communication.83 5.73 0. we classify the SBU’s strategic type (prospector.64 12.67 2.66 0. We required that for an SBU to be classified as a prospector or a defender.75 8. analyzer.70 0. technology knowledge creation.86 0.93 0.70 0.83 0.83 0.) Information technology systems for facilitating technology knowledge creation Information technology systems for facilitating market knowledge creation Eigenvalue of this factor Percent variance explained by this factor 0. retailers. levels of the organization.6 0.) Eigenvalue of this factor Percent variance explained by this factor Inside-out capabilities Manufacturing processes Technology development capabilities Ability of predicting technological changes in the industry Production facilities New product development capabilities Eigenvalue of this factor Percent variance explained by this factor Marketing capabilities Knowledge of competitors Effectiveness of advertising programs Integration of marketing activities Skill to segment and target markets Effectiveness of pricing programs Knowledge of customers Eigenvalue of this factor Percent variance explained by this factor Information technology capabilities Information technology systems for facilitating cross-functional integration Information technology systems for new product development projects Information technology systems for internal communication (e. it must have at least seven “correct” answers.69 0.3 Strategic type and firm capabilities 523 Table I. or reactor) using the “majority-rule decision structure” (see Conant et al.g. market knowledge creation.63 1..88 0.Outside-in capabilities Market sensing capabilities Customer-linking (i.36 20. . (1990).46 0. etc. across different departments. Principal component factor analysis integration. Following Conant et al.95 0. etc.67 0.7 0.94 0. 1990 for details) with one modification.80 0.7 0. Classification of strategic type. defender.e.81 0.79 0. We used the Conant et al.78 4.39 25. (1990) eleven-item scale to classify firms into four strategies (see Appendix).

Additionally. we feel confident in using the Conant et al.84 to 0. (1990) scale and by independent knowledgeable experts (see text for details). the MANOVA F-statistic was found to be significant for all four relative capabilities. a multiple-item scale was obtained by a simple average of the items. the scale classified the organization into the same strategic type category as the experts did). External validation of multiple measures of strategic types . This procedure classified the 245 organizations as follows: 83 prospectors. (1990) multi-item scale has been validated using external experts. We believe this is the first time the Conant et al. As shown in Table II.865 Notes: The entries in this table are mean reliability scores for each of the items of the Conant et al.841 Entrepreneurial – growth 0. so pairwise Strategic dimensions Entrepreneurial – product market domain 0. The results suggest that the Conant et al.849 Engineering – technological goal 0.e.841 Engineering – technological breadth 0.845 Administrative – planning 0. 51 defenders and 35 reactors.865 Administrative – structure 0. Approximately 90 percent of firms were classified correctly by the multi-item scale. As a result. (1990) multi-item scale to classify the organizations in our samples by strategic type. Test of propositions To test our propositions we compared the scores on each of the four multiple-item relative capabilities across all four strategic types using multiple analysis of variance. A score of 1 was assigned to organizations that were classified the same way by the Conant et al. and the first time it has been validated in the Chinese business environment. (1990) multi-item scale by using an independent assessment of strategic type made by experts who were highly knowledgeable about the Miles and Snow typology. the responses given on each individual scale item were consistent with the “correct” strategic type about 85 percent of the time. 76 analyzers. For full text of scale items and possible responses. That is.865 Entrepreneurial – success posture 0. For each factor.845 Administrative – dominant coalition 0. we calculated the mean reliability score for each of the eleven individual items. and a score of 0 to organizations classified incorrectly.865 Engineering – technological buffers 0. We assigned a reliability score of 1 to organizations that were classified “correctly” by the multi-item scale (i.86 (see Table II).5 524 Analysis and results Validation of multi-item strategic type scales We validated the Conant et al.IMR 20.849 Administrative – procedure 0.849 Entrepreneurial – surveillance 0. see Appendix Table II. and found these means to be consistently in the range of 0. (1990) scale. scale correctly classifies firms about 85 percent of the time.

The t-test results of the pairwise comparisons are also included in Table III. in particular. analyzers and prospectors respectively. It should be noted that no counterintuitive findings were obtained for any of the four propositions: all significant findings were in expected directions. 0.) The relative outside-in capabilities of defenders and analyzers firms are significantly higher than those of prospectors.05. Our results suggest that this expectation is not borne out in China.comparisons were computed to examine the nature of the differences in relative capabilities among the four strategic types.37). P2 is also supported. 2.94 respectively). A .05.58. and 7.21. We find support for all of these propositions. and therefore did not fully develop internal capabilities that allow them to compete successfully. see note at bottom of table. T-tests of the paired comparisons showed both the defender mean and the analyzer mean to be significantly larger than the prospector mean (D . (In Table III. According to Table III. Finally. we report support for a proposition if at least two pairwise comparisons are significant and in the expected direction. The F-statistic from the ANOVA is 11. 3.69 and 2.71 and 4.96.05). and 7. P4 was strongly supported. 8. respectively. analyzers and defenders are. analyzers. 0. Defenders had significantly higher relative marketing capabilities than prospectors (relative capabilities for defenders and prospectors were. which is significant at p . while defenders would have the greatest relative strengths in marketing and outside-in capabilities. P. The results in Table III provide support for all four propositions. that reactors reported higher relative outside-in and marketing capabilities than did any other strategic type (2. To summarize: our expectations were that prospectors would be most likely to be strongest in relative inside-out and information technology capabilities. One unexpected finding concerned the relative capabilities of reactors.43.05 level. This finding is consistent with P1.22.53. Relative inside-out capabilities are significantly higher in prospectors than in analyzers or defenders (the capabilities for prospectors. while the analyzers’ relative capability was 3.21 for defenders. and defenders are 8. P3 was supported. 0.17. mean scores on outside-in capabilities are 2.92. Miles and Snow (1978) found that reactors did not implement strategies consistently. although the difference between defenders and analyzers is not significantly different. Prospectors had significantly higher relative information technology capabilities than analyzers and defenders (the capabilities for prospectors. and 1. prospector mean significantly larger than the other two means at p . different at p . respectively. We noted. 8.13 respectively). 7.81. P) at the p . 0. One possible explanation is that Chinese firms that are newly expanding their scope of operations to serve the export market (or even far-away domestic regions within China) have outside-in (market sensing and linking) and marketing capabilities that are better Strategic type and firm capabilities 525 .

58 7.96 8. D. R Notes: Each cell shows standard deviation below mean in parentheses.10.30* D .28) (1. 0. P. P . Yes R . *: p . P . A.71 (1.21 (1. A hypothesis is supported if at least two pairs significantly different in the hypothesized direction Table III. P.52) 2. R. Yes (2. R.43 6.85) P . P. Yes (1. Yes (1.10) (1.45) R. 0. R Marketing capabilities 2. A.19) (1.81 7. **: p .17 (1. significant differences at p .10 are reported.28) 2. D. A .13) (1. P Inside-out capabilities 8.33) (1. In univariate F-value column.37 3.49) 2.52) (2.05.20) (2. A . D .94 7. P Information technology capabilities 8.69** P . Analysis of variance results: capabilities and strategic types Strategic type Analyzer Defender Univariate F-value Paired comparisons (t-tests) Hypothesis supported? .60) P .82) (2. In paired comparison column. A. D.53 7. R.21** Outside-in capabilities D .69 4.74) Reactor 11.22 (1. A .59 13. R.79 15.13 2.27) (1.38** P .92 3.5 526 Countries/relative capabilities Prospector 1. A .IMR 20. 0.

capabilities determine strategy). displays reactive behavior) may nonetheless be highly skilled in marketing and market sensing and may be a surprisingly formidable opponent. and to be successful in doing so. and defenders would need to develop outside-in and marketing capabilities in order to compete effectively. These firms use their skills in marketing to venture out into new foreign markets.[1] Organizations adopt certain mechanisms in response environmental changes (Miles and Snow. these capabilities are a source of competitive advantage and are exploited by management by choice of strategy (i. or the firm that does not develop a consistent strategy with all the associated capabilities (Miles and Snow. We mapped four capabilities of innovating firms onto the Miles and Snow strategic typologies and developed a theoretical framework. 1978). to compete effectively. one surprising and anomalous Strategic type and firm capabilities 527 . The extant studies used to develop this framework assumed a Western. seek to protect existing positions within their industries. we do suggest that it can be used to shed light on the rapidly globalizing competitive environment in China. 1983) According to this framework. above all. prospectors would need to build up inside-out and information technology capabilities. capitalistic competitive environment.e. analyzer and defender) are preferable to the reactor. As a result. We found supporting evidence for all our propositions. Their superior market sensing skills allow them to act as prospectors in certain markets selected for entry. A firm that pursues a given strategy develops certain capabilities that help it to implement its preferred strategies (i. or patterns of product/market innovation decisions.. “prospectors tend to want to continue prospecting” (Hambrick. where they are likely to behave in a highly reactive manner. They may choose to be pioneers in product or market development. While not claiming that the theoretical framework is universally generalizable. strategy determines capabilities). all of the archetypal strategic types (prospector. firms exhibit relatively consistent strategies. This is not to say that the differences between Chinese and Western business environments are trivial. A multinational organization doing business against a Chinese competitor should keep in mind that a firm apparently lacking a consistent strategy (i. or find an intermediate position between these two extremes.e. a typology of innovation strategies. in response to environmental shifts. As noted earlier. and possibly as adapters or defenders in others. 1990). the Miles and Snow typology is. and the few available empirical studies had been conducted in North America. We then collect empirical data among state-owned enterprises in China to assess the generalizability of this theoretical framework in a vastly different business environment. We proposed that. 1978. As noted earlier. Indeed.developed than those of Chinese firms just serving the local market. That is. Conant et al.e. the organization that formulates a consistent strategy over time develops response mechanisms for dealing with environmental change.

An organization should not. It would be interesting to conduct this study again in several years. and selecting an appropriate strategic posture. these firms will score better on these capabilities than will more locally-focused Chinese firms. take lightly a challenge from a Chinese competitor apparently following a reactor strategy.5 528 finding concerned the unexpectedly high levels of marketing and market sensing and linking capabilities among Chinese reactors. therefore. This is. an organization should recognize their main competitors’ apparent strategic types when conducting an external assessment. Our theoretical framework suggests that there is a complementary relationship between capabilities and strategies. considering its own strengths and weaknesses relative to the competitive environment. to a certain extent. Among Chinese SOEs. taking advantage of this newfound autonomy by venturing to foreign markets (or smaller Chinese firms branching out into far-away regions of their large home market) may have to compete by being reactive to the changing business environment in the targeted foreign market. As noted in the results section. marketplace changes. and the contention that the most successful organizations do tend to respond in certain consistent ways in response to environmental change. That is. a resource allocation issue: when making investment decisions. As noted above organizations doing business with Chinese competitors (perhaps for the first time) should recognize that reactors perceived themselves to be surprisingly strong in certain capabilities. this finding may be a reflection of the recent changes in the Chinese business environment reducing the role of the government in planning and strategy and allowing SOE management more decision-making autonomy. Our findings may be an artifact of the fact that the Chinese business environment changes are still relatively new. Then.IMR 20. to determine whether many of these current reactors have developed into more conventionally preferred strategic types such as prospectors or defenders. Their superior marketing and market-sensing capabilities allow them to react quickly and correctly. and to respond effectively to. and continuing to prospect should further develop these relative strengths and solidify the prospector’s competitive position. prospectors develop the greatest inside-out and information technology capabilities so they can continually and successfully pursue first-to-market initiatives. considering that these strategic types may not change rapidly. more so that would have been predicted by the Miles and Snow model. As a result. relative strengths in inside-out and information processing capabilities are more consistent with pursuing a prospector (or even analyzer) strategy. it should do an honest internal assessment. There are some implications for theory and future research derived from this study. Similarly. The results generally support the Miles and Snow typology. to compete effectively. First. Chinese SOEs. defenders develop greater outside-in and marketing capabilities in order to stay abreast of. the organization should allocate more to . Several managerial implications are derived from this study.

and Wensley. A. in Warner. and Einhorn. While common in this type of research. pp.J. pp. J.. Borrus. May 17. Vol. (1987).S. (1999).building up capabilities that are most consistent with the chosen strategic type (defenders need to build up outside-in capabilities. Conant. B. 37-52. New York.S. Journal of Marketing. Child. (1993). NY. Business Week. Strategic type and firm capabilities 529 . and Cool. Martin’s Press.S. “The capabilities of market-driven organizations”. (1990). pp. 56-57. R. Free Press.. and Engardio. Business Week. 1504-11.H. Barnathan. 365-83. “Firm resources and sustained competitive advantage”. pp. and Schoemaker. Vol. (1994). “The new trade superpower”. Engardio. 56-8. 45 No. A. I. 14 No. Management Science. Vol. Vol. pp. Market Driven Strategy: Processes for Creating Value. (1990).. pp. Journal of Management. 35 No. pp. 12. Management Science. G. (1993). J. 1. 2. “Rethinking China”. Bharadwaj. 54-68.P. and Konsynski. (1991). Vol. we used cross-sectional information obtained from self-reports. 1008-24. K. March 4. Strategic Management Journal. M. (Ed. Barnathan. NY. Day. 99-120. References Amit.G. J. Note 1. R. and prospectors need to build up inside-out. Mokwa. October 16. further information about how organizations chose their strategic stances and how firm capabilities evolved through time could not be studied. B. We recognize several limitations to our study. Day. and using more data sources would have reduced self-report biases. Our findings suggest that these implications are as relevant for managers in Chinese firms as they are for managers from Western firms.). “Asset stock accumulation and sustainability of competitive advantage”. 4. There are other important organizational capabilities such as financial management and human resource management capabilities. pp. J. “Strategic assets and organizational rent”. Management Reforms in China. (1996). 33-46. “Information technology effects on firm performance as measured by Tobin’s Q”. P. 17. 11. First. 7. “Assessing advantage: a framework for diagnosing competitive superiority”. we selected four important strategic capabilities. distinctive marketing competencies and organizational performance: a multiple-measures-based study”. “Enterprise reform in China: progress and problems”.R. for example). 52 No. (1995). Barney. (1988). (1987). P. P. S.S.S. Business Week. M. yet several others could have been added to the study (such as human resource management capabilities). Journal of Marketing. Day.R. Second. Vol. Dierckx. G. Bharadwaj. “China: the emerging economic powerhouse of the 21st century”. J. P. St. pp. pp. and Varadarajan. New York. 58 No. Strategic Management Journal. G. who will be increasingly doing business with China in the future. Curry. 1-20. “Strategic types. L. Vol. We thank a reviewer for this insightful suggestion.

2. 1-18. (1978). 53-70. “Introducing market forces into managerial decision-making in Chinese industrial enterprises”.A. Journal of Marketing. and Sullivan. 6. L. Vol.-K. A. Gupta. pp. Fornell. R. Vol. Journal of International Business Studies. J. Griffin. research propositions. 23 No. (1986). 3.K. 1.A. and Hauser. (1990).J. 11 No. 3. and Kohli. “The resource-based view within the conversation of strategic management”.A. (1990). Management Science.W. 609-24. 12 No..5 530 Dillman. 635-56. pp. pp. (1992). Henley. Peter. C. 15 No.D. pp. pp. Jaworski. 19-30. pp. (1978).M. 11. S.K. 1. “Are market pioneers intrinsically stronger than later entrants?”. 6-17. pp. and Pandian. 4. Vol. Vol. (1987). Mahoney. pp. . Moenaert. corporate structure and performance”. R. A.. relative marketing effort. D. Rajaratnam.W. and Snow. (1993). M. (1992).P. pp. and Chonko. Robinson.J. New York. W. and managerial implications”. Vol. Reed. J. O. 3. barriers to imitation. (1996). 50 No. Structure. B. and Ireland. pp. 1. 7-17. Hambrick. 60-75. (1979). B. Vol. 1. and Jaworski. Strategic Management Journal. product-market growth strategy. Journal of Marketing. 363-80. J. Vol.K. 13 No. Journal of Marketing Theory and Practice.A. Academy of Management Review. A1-A12. and sustainable competitive advantage”. C. “Relationships among corporate level distinctive competencies. February 14. (1997). 1592-610. 360-73.E. pp. and Hauser. (1986). Journal of Marketing Research. Journal of Marketing. Management in China During and After Mao in Enterprises. 16 No. M. pp. and Kolari. 401-16. “Marketing strategy implications of the Miles and Snow strategic typology”. Vol. 4. J. 13. pp. Vol. and Song. Academy of Management Journal. “The voice of the customer”. R.K. Vol. 88-102. J. 467-93.C. “Market orientation: the construct. NY. 28 No. Wiley. Walter de Gruyter. and De Fillippi. and organization performance”. Mail and Telephone Surveys: The Total Design Method. 3 No. “Context and antecedents of information utility at the R&D/marketing interface”. 57 No. A. 4. W. and Souder. D. N. 1-27. M. (1988). NY. pp. A. and Party.P. diversification strategy. Journal of Management Studies. X. McGraw-Hill. Vol. R. “Reliability: a review of psychometric basics and recent marketing practices”. The New York Times. Kristoff. Kohli. 1. (1994). 51 No. “A model for studying R&D-marketing interface in the product innovation process”. R.R. 3. NY. and Wilemon. and Nyaw. Dyer. B. Marketing Science. Laaksonen. pp. New York. D. Raj. (1995). pp. engineering and manufacturing: a comparison between two new product teams”. Strategic Management Journal. New York. Vol. (1986).D.IMR 20.T. 5-25.B. Vol. 42 No. 54 No. “The effect of business strategy type on marketing organization design. “The impact of strategy on conflict: a cross-national comparative study of US and Japanese firms”. Organizational Strategy. Vol. pp. S. 15-30.T. 38 No. Hitt. Vol. (1993). (1983). “Market orientation: antecedents and consequences”.E. 26 No. and Process. “Some tests of the effectiveness and functional attributes of Miles and Snow’s strategic types”. Vol.W. 2. “Identifying new product success in China”. M. Griffin. (1993). Journal of Marketing. Parry. Management Science. McDaniel. “Entrepreneurial energy sets off a Chinese boom”. Vol. Miles. J. “Patterns of communication among marketing. pp. D. (1992). “Causal ambiguity. Government. Journal of Product Innovation Management. J. Journal of Management Studies. 23 No. A.

56 No. Strategic typology scale items The following statements describe some characteristics of this selected strategic business unit/division. Ballinger Publishing Company. 40 No. (Ed. E. Vol. 4th ed. and Walker. 527-38.W. “A resource-based view of the firm”. 6. 9. Products that are fairly stable in certain markets while innovative in other markets (A). “What the hell is “market-oriented”?”. 2. MA. Vol. Journal of Product Innovation Management. 9-21. Vol.E. Vol. R. (1988). B.C.W. E. Swanson. (2003). (1988). “Measuring organizational strategies”. Academy of Management Journal. Jr. M. E. and Larreche. Products that are more innovative. “The changing role of marketing in the corporation”. Vol.-K. pp. Webster.C. 41-58. Organization and Management in China 1979-1990. D. “Information systems innovations among organizations”. 1-17. “Managerial leadership in Chinese industrial enterprises”. Marketing Strategy: A Decision-Focused Approach. 66 No. 1069-92. Shortell.B. (1990). the products which we provide to our customers are best described as: (entrepreneurial – product market domain) . pp. pp. (1994).-C.E. Inc. Mullins. Strategic Management Journal. pp. Fortune. Song. (1988). J.M. O. H. 5. Vol.P. 8. (1980). and Zajac. Vol.M. 9. (1) In comparison to our competitors. and Hambrick. Shapiro. and largely respond to opportunities and threats in the marketplace (R).C. Vol.J.R. . 4. McGraw-Hill/Irwin. 4. 171-80. pp. 817-32. (1984). X. 11 No. “Perceptual and archival measures of Miles and Snow’s strategic types: a comprehensive assessment of reliability and validity”. . Jr. D. 5. J. “Where capitalism thrives in China”..). O. pp. R. Appendix. Strategic Management Journal. pp. (1992). F. London.B. pp. Please circle the description that best describes this selected business unit. “The Dimensions of industrial new product success and failure in state enterprises in the People’s Republic of China”. 233-48. Jr (1987). and Detlef. Schermerhorn. J. . and Montgomery. S. and continually changing (P). C. Vol. M. pp.B. 5. ´ ´ Walker. Academy of Management Review. NY. pp. 71-5. New York. Boyd. Strategic Management Journal. pp. Harvard Business Review.Ruekert. D. Simon. Strategic type and firm capabilities 531 Further reading Leiberman. Management Science. Technological Innovation in China: The Case of the Shanghai Semiconductor Industry.C. Worthy. 33 No. F. (1991). M. Cambridge. Vol. “First-mover advantages”.S. B. 105-18. 119-25. (1992). 125 No. (1994). Snow. Jr and Nyaw. Wernerfelt. Products that are in a state of transition. Sharpe.F. “Interactions between marketing and R&D departments in implementing different business strategies”. in Shenkar.. . and Parry. O. Products that are stable and consistently defined throughout the market (D). Journal of Marketing.

Minimal: we really don’t spend much time monitoring the marketplace (D). .5 532 (2) In contrast to our competitors. Offers fewer. (4) In comparison to our competitors. . but only after careful analysis (A). specific areas (D). Reacts to opportunities or threats in the marketplace to maintain or enhance our position (R). . Lengthy: we are continuously monitoring the marketplace (P). or a few. Are able to carefully analyze emerging trends and adopt only those which have proven potential (A). Fluid: their skills are related to the near-term demands of the marketplace (R). . Broad and entrepreneurial: their skills are diverse. . to keep costs under control and to selectively generate new products or enter new markets (A). Make sure we guard against critical threats by taking any action necessary (R). . flexible. Our practice of concentrating on more fully developing those markets which we currently serve (D).IMR 20. . . resources. . (6) In contrast to our competitors. . Has a reputation for being innovative and creative (P). . Sporadic: we sometimes spend a great deal of time and at other times spend little time monitoring the marketplace (R). the increases or losses in demand that we have experienced are due most probably to: (entrepreneurial – growth) . Our practice of assertively penetrating more deeply into markets we currently serve. (5) One of the most important goals in this business unit in comparison to our competitors is our dedication and commitment to: (engineering – technological goal) . Keep our costs under control (D). . (7) The one thing that protects us from our competitors is that we: (engineering – technological buffers) . Adopts new ideas and innovations. while adopting new products after a very careful review of their potential (A). the competencies (skills) which our managerial employees possess can best be characterized as: (engineering – technological breadth) . Insure that the people. (3) The amount of time our business unit spends on monitoring changes and trends in the marketplace can best be described as: (entrepreneurial – surveillance) . and equipment required to develop new products and new markets are available and accessible (P). we have an image in the marketplace that: (entrepreneurial – success posture) . . Average: we spend a reasonable amount of time monitoring the marketplace (A). Analytical: their skills enable them to both identify trends and then develop new products or markets (A). . Specialized: their skills are concentrated into one. and enable change to be created (P). select products which are high in quality (D). Analyze our costs and revenues carefully. . Our practice of responding to the pressures of the marketplace by taking few risks (R). . Our practice of aggressively entering into new markets with new types of products (P).

Highly centralized and primarily the responsibility of senior management (D). Analyzing opportunitiesin the marketplace and selecting only those opportunities with proven potential. . . . a product or market oriented structure does exist in newer or larger product offering areas (A). Identifying trends and opportunities in the marketplace which can result in the creation of product offerings which are new to the industry or reach new markets (P). (R) ¼ reactor.e. however. Maintaining a secure financial position through cost and quality control (D). Identifying those problems which. . this business unit prepares for the future by: (administrative – planning) . Developing new products and expanding into new markets or market segments (P). . if solved. not part of the instrument. (D) ¼ defender. Provided here for informational purposes only. Unlike our competitors. Activities or business functions which most need attention given the opportunities or problems we currently confront (R). . personnel. the procedures we use to evaluate performance are best described as: . our management staff in this business unit tends to concentrate on: (administrative – dominant coalition) . . . (A) ¼ analyzer. More so than many of our competitors. In comparison to our competitors. .(8) (9) (10) (11) Are able to do a limitednumber of things exceptionally well (D). Decentralized and participatory encouraging many organizational members to be involved (P). Centralized in more established product areas and more participatory in new product areas (A). .) (D). Are able to respond to trends even though they may possess only moderate potential as they arise (R). Primarily functional (departmental) in nature. . . Functional in nature (i. . Continually changing to enable us to meet opportunities and solve problems as they arise (R). In contrast to many of our competitors. accounting. Are able to consistently develop new products and new markets (P). . Heavily oriented toward those reporting requirements which demand immediate attention (R). organized by department – marketing. Identifying the best possible solutions to those problems or challenges which require immediate attention (R). will maintain and then improve our current product offerings and market position (D). Identifying those trends in the industry which our competitors have proven possess long-term potential while also solving problems related to our current product offerings and our current customers’ needs (A). . . while protecting a secure financial position (A). Strategic type and firm capabilities 533 Notes: (P) ¼ prospector. Product or market oriented (P). etc. our organization structure is: (administrative – structure) .

Gyunggi.5 A cross-cultural comparison of Internet buying behavior Effects of Internet usage. Innovation. Nonetheless. Results showed that there were significant differences in Internet usage and the perceived risks of Internet shopping. 1998). and innovativeness Cheol Park Department of Management Information Systems. Seoul. South Korea. analyzing a regression model of factors influencing Internet buying behavior. combined with the nature of the communications that it can convey. Online catalogues Abstract This research attempted to examine differences in Internet usage. International Marketing Review Vol. but no significant differences in Internet buying intentions or online buying experience between Korean and American consumers.1108/02651330310498771 Introduction The Internet is revolutionizing marketing and trade. perceived risks. The global nature of the Internet. 534-553 q MCB UP Limited 0265-1335 DOI 10. perceived risks of Internet buying. Perceived risks. and innovativeness on a cross-cultural basis. and to identify a model for factors influencing Internet buying behavior.emeraldinsight.com/0265-1335. and cultural differences in effects of Internet usage and perceived risks on Internet buying behavior were found. and 534 Jong-Kun Jun Department of Trade. since Internet shopping tends to be impersonal. cultures that score high on uncertainty avoidance are less likely to be early adopters of Internet marketing schemes. As the Internet is essentially a global medium.The Emerald Research Register for this journal is available at http://www.emeraldinsight. 1999). The implications of the study are discussed and further research was suggested. While there were main effects of Internet usage and perceived risk on Internet buying behavior. it is one of the most significant and the greatest marketing tools for the global marketplace (Samiee. For example. International consumer research in a cross-cultural context is needed for a better understanding of global online consumer behavior (e.htm IMR 20. perceived risks. United States of America.com/researchregister The current issue and full text archive of this journal is available at http://www. some observers . it is not clear that a Confucian-based culture of personal interaction is well suited to it. South Korea Keywords Internet marketing. even if other cultural imperatives are met. explained by Internet usage. Cultural imperatives are likely to have a profound impact on the adoption and the use of the Internet in international marketing. 20 No. Republic of South Korea. Hankuk University of Foreign Studies. methodical. 2003 pp.g. Internet innovativeness. 5. Korea University. However. and Internet buying behaviors between Korea and America. Furthermore. Javenpaa and Tractinsky. and policy-driven. makes it a perfect vehicle for international interactive marketing. these effects were weaker or even opposite to those related to Korean samples.

1989). and is there a worldwide common culture of the Internet? The tremendous advances in global travel.. First. searching for product information online. communication. Theoretical background Internet usage Studies on the determinants of IT adoption and usage argue that perceived usefulness and perceived ease of use are primary explanations of computer acceptance behavior (Davis.view Internet-based transactions as essentially culture-free and personal owing to the perception that they bring parties closer together (Perterson et al. and Internet shopping behaviors between Korea and America and to identify a model of Internet buying. There are two reasons why we chose to compare Korea and America. 1995). while the effects of perceived ease of use and perceived enjoyment are partly supported. Similarly. Some researchers found that many international users of the Internet are similar to US users (Quelch and Klein. 1997). They show that a typical online buyer has a “wired” lifestyle. they are both in the leading group in terms of Internet usage. They showed that the longer the amount of time spent online. Igbaria et al. 1996). (2000). Second. Are Internet users around the world homogeneous. the two nations are culturally very different from one another because Americans are generally individualistic whereas Koreans are traditionally collective. explained by Internet usage. Teo et al. the Internet subscribers per 100 inhabitants of the two countries are well above the OECD average (OECD. found that the percentage of panelists making a purchase on the Internet increases as a function of time spent online. (1994) report perceived usefulness and perceived fun play respective roles in the acceptance of microcomputer technology. and the attitude Internet buying behavior 535 . (1998) found that perceived usefulness has consistently strong effects on Internet usage. 1999).. According to an OECD report. the greater the chance of making a purchase online. Number of months online as well as length of time spent online is an important predictor of online buying behavior (Bellman et al. common or uniform behaviors appear. perceived risk. hours online per week. innovativeness. There are few cross-cultural studies on the adoption of Internet shopping. or at least lead to. attitude (innovativeness and perceived risks). These factors can be applied to explain Internet usage. 2001a). using panel data. This research attempts to examine the differences in Internet usage. and media have led to suggestions that cultures are converging and that the globalization of markets will create. there continue to be clear differences in what these behaviors mean to the individuals and groups of different cultures (Costa and Bamossy. and online buying experience on a cross-cultural base. We could find some similarities and differences in Internet shopping behavior between different culture groups. a common culture worldwide. 1986. hours per week working online. The wired lifestyle variables include: number of months on the Internet. Loshe et al. However.

Perceived risks Many marketing practitioners and researchers continue to be interested in perceived risk because it is more powerful in explaining consumer behavior and also because the theory has intuitive appeal and broad application (Mitchell. 1976). arguing that this kind of innovativeness is an important predictor of the adoption of innovations. (1997) observed cross-cultural differences also in the perception of the riskiness of financial gambles. The perception of the riskiness of activities threatening health and safety showed cultural variation (Slovic et al. There are two approaches to innovativeness. Joseph and Vyas (1984) focus on a cognitive style. Citrin et al. 1978. attitudes towards perceived risk between subjects make significant differences in risk preference (Weber and Milliman. Innovativeness should also be thought of as a domain-specific phenomenon. which incorporates an individual’s intellectual. Innovativeness Innovativeness has received considerable attention among consumer researchers (e. Rogers. 1980. Midgley and Dowling. global innovativeness. and attitudinal characteristics. but more predictive of actual behavior in a specific product than is global innovativeness (Goldsmith and Flynn. For some decision situations like gambling or stock market investing. Goldsmith and Hofacker (1991) developed the domain specific innovation scale as a Likert scale. Perceived risk is negatively correlated to self-esteem. Kleinhesselink and Rosa. 1983).5 that email is indispensable. 1991). (2000) argued that the likelihood of purchasing on the Internet decreases with increases in product risk. 1991. perceptual.IMR 20. Similar findings have also been reported by the research of Citrin et al. Their findings indicate that Internet usage and domain-specific innovativeness have a direct influence on the adoption of Internet shopping. They also report that domain-specific innovativeness is a moderator of the relationship between Internet usage and the adoption of the Internet for shopping. comparing students and security analysts from the USA. Risk perception is argued to have cross-cultural variation. Bontempo et al. but that general 536 . linked to broader innovative traits.g. Hirschman. 1997).. and Taiwan. Previous research has also demonstrated the existence of cross-cultural differences in risky choices. Hong Kong. rigidity and risk taking and positively correlated to anxiety (Shaninger. 1995). the Netherlands. (2000) on the role of Internet usage in the acceptance of Internet shopping. 1999). (2000) adopted the two measures of innovativeness to explain consumer adoption of Internet shopping. arguing that it is a more useful predictor of the adoption of innovations by consumers. The variables predict buying behavior for 79 percent of the sample. Weber and Hsee (1998) argue that people in socially-collectivist cultures tend to choose riskier options than those in individualist cultures. Attitudes toward perceived risk also affects consumer behavior. Bhatnagar et al.

Like perceived risk. which is dominant in Western cultures. As hedonic value primarily gratifies the internal. consumer innovativeness can be different according to cultural differences. group bonds and harmony are viewed as important. Individualism-collectivism is a cultural-level variable referring to the extent to which members of a culture tend to have an independent versus interdependent construal of the self (Hofstede. Individualism and masculinity are positively related to consumer innovativeness whereas uncertainty avoidance is the opposite (Skeenkamp et al. 1999). Cheng and Schweitzer (1996) noted that American television ads stressed enjoyment much more than did Chinese commercials. 2001). Western cultural values describe how an individual from an individualistic society fulfills his/her needs through a market system that emphasizes individualistic goals (Tse.innovativeness does not influence the use of the Internet for commerce.. Harmonic and holistic benefits would be preferred in collective cultures while accurate and analytical benefits are opted for in individual cultures. The Western cultural value ascribes individualism and low-context while oriental ascribes collectivism and high-context (Kim et al. The independent construction of the self. private self. and masculinity. 1998). Males were found to use the Internet for downloading and purchasing activities to a greater extent compared to females (Teo. In collective and high-context cultures. Demographic variables Demographic variables have been reported as significant variables influencing on Internet usage and buying. The most typical category is Western vs Oriental culture. Hofstede (1980. 1996). One possible reason is that since males are more likely to be interested in learning and using PCs compared to females. 1991) identifies three dimensions of national culture that can be related to consumer innovativeness: individualism. Cultural differences People are deeply influenced by the cultural values and norms they hold. explicit communication and clear procedures are preferred. 1999). is rooted in the belief that distinct individuals are inherently separate (Wong and Ahuvia. Collectivists tend to be concerned with affiliating closely with others. in individual and low-context cultures. Such traits were represented in pursuing the values or benefits from certain activity or behavior. uncertainty avoidance. These cultural values influence consumption related behaviors (Wang. 1998). 1998). On the contrary. while analytical procedures and structures tend to be avoided. and blending the self/other boundary (Aaker and Williams. Many researchers have classified cultures around the world in various categories.. maintaining connectedness. Zeffane and Cheek’s (1993) study of computer usage in an Australian telecommunications organization found that age was negatively correlated Internet buying behavior 537 . they are likely to be more skilled in downloading and purchasing activities on the Internet. 1980).

. 2002). but more complex than. Second. many Koreans feel freer when communicating with one another on the Internet. Research questions Concerning Internet usage time. Rather. The following concepts are said to be fundamental to understand the communication behavior of Korean people: che-myon (described as akin to. Western or Chinese concepts of “face”). This has been possible because the Korean government had made the information highway a national priority. Since nearly 40 percent of the housing in Korea is apartments. broadband has been relatively easy and cost-effective to install. maintaining connectedness. 1998). The ideology of independence. suggested that age was not significantly related to usage of the Internet in terms of purchasing. jung (described as a psychological bond that goes beyond attachment and love). individuality and privacy has not yet been fully developed in Korean society. however. which are highly time consuming (NetValue. Koreans lead the world in per-capita broadband usage.IMR 20. recently Korea become one of the leading countries of Internet development and there are some unique cultural and infra-structural points relating to Internet usage. Individuals still do not exist alone. People in collectivist societies conform more to their peers because they regard the behavior and opinions of their peers as reference points. Koreans usually do not speak to strangers. which is highly conducive to heavy Internet use. combined with Koreans’ family-like social relationships helps to promote Internet usage. However. gender and occupation are reduced in computer-mediated communication (see Tan et al. Furthermore. 1996). Collectivists are concerned with affiliating closely with others. But because status effects such as age. the average monthly broadband subscription is $28 (USD) with unlimited access time. There are a 538 . 2001). Teo (2001). one might presume that Americans spend more time on the Internet than Koreans because America is a more developed country and is of course the origin of the Internet. value placed on harmony with others accounts for the collectivist styles of communication and for the absence of argumentation and debate in their daily life (Becker.. Furthermore. the low price of Korea’s broadband services (Point Topic. 2001). first because they show a high level of conformity with their peers (Cho and Kim. although collectivism still remains (Han and Shin. 2000). Because of che-myon and noon-chi. Koreans may spend more time online. 1986). and blending the self/other boundary. High-speed connections encourage Koreans to use online audio/video components and to play online games. Likewise. Korean culture has undergone individualization for decades.5 with computer usage. and noon-chi (described as an aspect of tacit communication akin to mind reading) (Gudykunst et al. they exist as a part of their extended family and a collective network. Korean people a have high degree of conformity with their peers in using the Internet because Korean society is characterized by collectivism.

Secure servers are essential for e-commerce and trust. which escalates the availability of the Internet.´ lot of PC rooms (like Internet cafes) in Korea as well. perceived risks. We Internet buying behavior 539 Figure 1. 1997). and nationality. and cable TV for much longer than Koreans have. Korea had less than one secure server per 100. almost the lowest level among the OECD countries. Do Korean Internet users perceive more risks in Internet buying than American users? Other research questions are relating to factors influencing Internet buying behavior between two countries.. The uptake of B2C e-commerce is constrained by the availability of adequate infrastructure for secure transactions. In addition.We propose the following research questions: RQ1. because the use of secure transaction systems or policies on privacy protection will mainly determine the level of perceived risk (Figure 1). cultural background is a strong determinant of risk perception (Bontempo et al. The factors we considered were Internet usage. Secure servers per 100. Americans have experienced direct marketing through catalogues. Do Korean Internet users spend more time online than American users? RQ2.000 inhabitants . innovativeness. American consumers who are familiar with direct marketing may perceive less risk involved in Internet buying. demographics. As stated above. 2001b). but the perceived risk of online shopping is not just a cultural matter. This infrastructure is unevenly distributed across countries. so the low availability of secure servers in Korea makes online shoppers perceive a higher risk.000 inhabitants in 2000. So. According to OECD. while the USA had almost 25 (OECD. telemarketing.

The majority of respondents from the PRC. The relationships between each exploratory variable and the dependent variable in Figure 2 were proved to be significant in past research. Bellman et al. According to Weber and Hsee (1998). 2000. Citrin et al. for purposes other than shopping. but not in attitude towards perceived risk. 1999. Citrin et al.5 540 built a conceptual model explaining factors influencing online buying on the basis of past studies (e.g. but nationality and its interactions has never been considered. Lohse et al. although marginal. Swaminathan et al. (2000) argued that the likelihood of purchasing on the Internet decreases with increases in perceived product risk.. effect on the frequency of shopping on the Internet (Swaminathan et al. 2000). Goldsmith and Hofacker.. Conceptual model of Internet shopping . Domain-specific measures of innovativeness have yielded more useful predictions of the adoption of innovations by consumers (e. there are cross-cultural differences in risk perception.. 2000). 1999. result in increased levels of the use of the Internet for shopping.IMR 20. 1999).. both Internet usage and consumer innovativeness are positively related to the adoption of Internet shopping in the USA (Citrin et al. Figure 2..g.. 1991). Perceived security of transactions had a negative. (2000) found that higher levels of prior Internet usage.. According to previous research. 2000). Bhatnagar et al. It was found that there is a significant positive relationship between domain-specific innovativeness and the adoption of the Internet for shopping (Citrin et al. Perceived product risks and consumer innovativeness may have different relationships to the adoption of Internet shopping in different cultures.

. and 44. Of the Korean respondents 150 completed the online survey. There are few cross-cultural studies on how Internet usage. While the experience of Internet shopping is a measure of behavior. One’s past experience is an important influencing factor of one’s future action. An HTML-format questionnaire was published on the Web site and the panel members visited the website and responded to the survey.2 percent males. 2000).survey. Web-board postings and by inviting them to visit the online survey site (www.0 percent were in their thirties. actual purchase). we could not generate a representative sample of American Internet users. Is there a cultural difference in the effect of innovativeness on Internet buying behavior? Method Samples and procedures An online survey was performed for obtaining data. it seems to have an influence on intention to buy. The Korean sample consisted of 55.g. 6. newsgroups. 1999. so we attempted to identify cultural differences in these areas on Internet buying behaviors. 40. This lead us to making following research questions: RQ3. Is there a cultural difference in the effect of perceived risk on Internet buying behavior? RQ5. Unlike telephone surveys. Online buying experience means adoption of the Internet for shopping. 2001). The Korean subjects consisted of a panel from an online survey company in Korea (www. The available lists of e-mail addresses are usually not representative (Furrer and Sudharshan.kr).survey.g. Citrin et al.co. so we diversified the sources of respondents to newsgroups and Web-boards.USA. Korean traditional folding fans (bu-chae) were offered as an incentive for them. Of the US respondents 133 completed the questionnaire. and perceived risks influence Internet buying behaviors. They were given air mileage points as rewards. intention to buy) is widely regarded as the most immediate antecedent of behavior (e. Intention to behave (e. so the American respondents were contacted through email. and is usually obtained by asking how often they use Internet for shopping (e.0 percent were in their teens..7 Internet buying behavior 541 . We expect the same result will be found with Internet buying behaviors.kr). and 8. Swaminathan et al.3 percent were in their twenties. Is there a cultural difference in the effect of Internet usage on Internet buying behavior? RQ4.7 percent were over 40 years old.co.g. In the Korean sample. 45. We considered dependent variables such as Internet buying intention and online buying experience. consumer innovativeness. and Poland were willing to pay more for options perceived as less risky. Germany.

Measurements Internet usage.0 percent) than KNP had (27. so if we consider respondents who were in their thirties or older as a combined group the two samples then showed homogeneity in age distribution (Pearson chi-square ¼ 2. Number of months on the Internet was recoded to number of years on the Internet. two types of risk – product category risk and financial risk – are predominant. 19. p ¼ 0.93 with df ¼ 3. and 24. Perceived security of transactions and concern for privacy are major elements . In the US sample. But the number of respondents in their forties or over was relatively small.1 percent males). 32.. and 43. while KNP consists of 57.88 years and the mean time of Internet usage per week was 18. (2000) argue that in the case of Internet shopping.671 for the Korean sample and 0. Bhatnagar et al. However.kr) (e.8 percent). 6. less teenage respondents (6.9 percent in Nielsen/NetRatings). There was no difference in gender distribution (Pearson chi-square ¼ 0. p ¼ 0.com). We focused on the first two dimensions by measuring hours of Internet use.2 percent males. Perceived risks. Compared with the audience profile of Nielsen/NetRatings (www.g.84 years and the mean time of Internet usage per week was 11.3 percent were in their thirties. Risk is a multidimensional construct. 48.7 percent. the US sample had slightly more male respondents (56.15 hours. 36. Because the proportion of the respondents who were more than forty years old was a little bit higher in the US sample than that in the Korean sample.738 for the American sample. product risks are measured by concerns about product price and information. The gender distribution of the Korean sample compared favorably with the Korea Netizen Profile of 2002 (knp.06 with df ¼ 1.IMR 20. Since we focus on the risks involved in buying online regardless of product category.322).007). Hours of Internet use per week and number of months on the Internet were measured by open-ended questions.9 percent were in their teens. 1994). amount of daily Internet usage and diversity of Internet usage (Igbaria et al. Internet usage is said to have three dimensions: frequency of Internet usage. the Korean sample consists of 55.9 percent. Our samples were from convenience sampling. The mean period of Internet usage was 3.2 percent were in their twenties. Financial risk associated with Internet shopping is primarily in regard to losing money via credit card fraud. the two samples were statistically different in age distribution (Pearson chi-square ¼ 13. The reliability coefficient for the scale was 0.3 hours.7 percent males. Product category risk matters if one has a specific product in mind before getting on the Internet. The American sample consisted of 56. through the Korean sample had less teenage respondents (6. The mean period of Internet usage was 4.co.5 542 percent females.nielsen-netratings.adic.3 percent females. p ¼ 0.807) between the two samples.2 percent in Nielsen/NetRatings).27 with df ¼ 2.6 percent were over forty years old.

female ¼ 0) and nationality (Korea ¼ 1. We measured privacy and security risks by a two-item five-point Likert-type scale in which the former were privacy concerns and the latter were the payment concerns. intention to buy. Others. “2-3 times or more per month” (5).item scale. America ¼ 0) were coded as dummy variables. the constructs measured using multi-item variables were averaged for each factor and the averages were used as input for each construct. so we used their adoptation. Domain specific innovativeness (DSI) was measured using Goldsmith and Hofacker’s (1991) six. A measurement of buying intention at the Internet shopping mall included a seven-point Likert-type scale ranging from “never buy” (1) to “must buy” (7). and older than forty ¼ 0). and after exploratory factor analysis (see Appendix). but we used a five-point scale.5. Innovativeness.690 for the American sample. the scale was a seven-point Likert-type scale. 1979). As most marketing research is not of this nature. Internet buying behavior 543 Results Cross-cultural differences in Internet usage and Internet shopping behavior An Independent sample t-test was performed to see if there are any differences between respondents from Korea and those from America. “3-4 times per year” (3). 30 to 39 years old ¼ 2.782 for the American sample. The reliability coefficient for the scale was 0.581 for the Korean sample and 0. Age (younger than 29 years old ¼ 1. Originally. “1-2 times per year” becomes 1. The medium value of the each frequency scale was reassigned to make a numeric variable. “once per one or two months” (4). gender (male ¼ 1. The results are presented in Table I. We did exploratory factor analysis first to test unidimensionality.of financial risk in online transactions. Online shopping experience measured by purchasing frequency on the Internet shopping mall included a five-point Likert-type scale from “never buy” (1). “1-2 times per year” (2). Internet usage. Three items that had factor loadings greater than 0. The relatively lower reliabilities of some constructs might undermine the significance of the findings and their generalizability. lower levels of reliability may be acceptable in marketing research studies (Peter. “once per one or two months” codes as 9. Citrin et al. and items were anchored with “disagree strongly” and “agree strongly”. but Nunnally’s guidelines are primarily concerned with the development of finely tuned measures of individual traits to be used for decisions about individual persons (e. (2000) modified the scale for the Web.681 for the Korean sample and 0. . Among the constructs in the model.g. and online shopping experience (frequency of Internet shopping) are not measured with multi-item scales.5 were retained. GMAT tests). The scale yielded a standardized a = 0. For example. nationality.

826 0. there were significant differences in the explanatory variables such as perceived risks.74 2. This result was consistent with other research reports (e. perceived risk on product (RISK2).661 0.38 0.79 2.000 DSI 3.973 0. A Model on factors influencing Internet buying behavior Although there was no difference in online shopping experience (the frequency of Internet shopping) or in the Internet buying intention between the Korean sample and the US sample.13 11.27 4.26 1.66 4.44 4.409 BI 4.92 7. in addition to each of the former five variables’ interactions with nationality.94 0.84 4.g. Nat*RISK1 and so on).92 0.82 3.96 0.000 EXP 6.88 3. which means multicollinearity is not a problem. The VIF ranges from 1. nationality). We adopted a regression analysis to more clearly test the interaction effects (e. Internet innovativeness (DSI). Nielsen/NetRatings.28 7. Korean users were more innovative than American users.05 18. We could not find any significant difference in online shopping experience (EXP) nor in the Internet buying intention (BI) between the two samples.d.24 6.5 544 The period of Internet usage (length) in the US sample was longer than that of Korean sample.22 0.44 1. 2001).000 RISK1 3.02 0. but the hours of Internet use per week (hours) in the Korean sample was longer than that of the US sample. Mean s.098 Table I. we structured regressions to account for the differences in relationship strength by nationality.85 3. length of Internet use (length).13 10.80 24.27 0.88 3.g. Two demographic variables – gender and age – were included in the analysis Hours Total KOR USA Mean s.351 0. NetValue.79 0.15 16.593 0.37 1.211 0. The conceptual model can be transformed into a structural model.48 -0. we formed interaction terms.04 to 7. P 14. innovativeness.80 0.61 6.000 RISK2 3.44 3.83 5. nationality (NAT) as main effects. 2002.78 -0. Mean t-value sig.69 8.03 1.07 1.IMR 20.d. We calculated the variance inflation factor to check for multicollinearity.55 0. and length of Internet use.250 0. In order to test our proposed model.52 21. We believe regression method is more straightforward in estimating interaction effects with a dummy variable (e.23 1.77 2.08 3.g.49 1.83 1. but showed higher perceived risk on privacy and security (RISK1) as well as higher perceived risk on product (RISK2) than American users.84 6.30 12. To investigate the reason for this phenomenon.43. Comparisons of mean differences between Korea and the USA Difference . Since research questions 3 to 5 required testing for the moderating effects of nationality on the relationships between independent variables and dependent variable.93 15.d. hours of Internet use.000 Length 3. perceived risk on privacy and security (RISK1). we included hours of Internet use (hours). Mean s.33 4.

137) NAT*hours 20. whereas hours of Internet use is positively related to online buying experience (b = 0.05). Li et al.218) 0.093 (0.664) 0.073) NAT*length 20.180) 0. as indicated by R 2 for models 1 and 2 was 0.439) Research variables DSI 0.as control variables. 0.721 (5.136 (0. Citrin et al. ** p .403) Age 2 (30-39) 0. 0.056) Length 0.208 (0.430*** (0.452) EXP R2 0.145** (0. The explanatory power of the models. Therefore.183 F(15. 0.187 (0.963) Age 1 (# 29) 22.025) 0.689 (4. are presented in Table II. Studies using cross-sectional data usually encounter such a problem.115 and 0. Model 1 also shows that the two variables act differently in each country. 0. 2000.071) 0.651) RISK2 20.183 respectively.380 (0.789) Hours 0.223) 0. Results of regression analysis .492 (1. 1999.154 (0.156*** (0.259)=3.516 (0.155) NAT 20. A multiple regression analysis was used to estimate the model with the total sample.144) 20.031 (0.. The results.074) NAT*RISK2 20. Model 1 shows that perceived risk on privacy and security (RISK1) negatively affects online buying experience (frequency of Internet shopping) (b = 2 1.410 (0.170 (0..228) 0.855 Table II.0005 (0. *** p . 0.115 F-value F(14. One of the notable features of attitude is enduring and will likely be retained until there is some strong reason to change them (Shimp.913) RISK1 21.345 (0.027*** (0.125) 0.059 (0. Although perceived risk on privacy and security Internet buying behavior 545 Model 1 (dependant variable: EXP) Control variables (Constant) 22. in parentheses Model 2 (dependant variable: BI) 2. Nationality (NAT) showed interactions with perceived risk on privacy and security (RISK1) and hours of Internet use in model 1.05.260)=2. we assumed that the independent variables did not change during the period of our concern and considered model 1.104) 0.012) 0.082 (1.932) 20.016 (0.010) 0. 2001.417 Notes: * p.201) Gender 20.171) 20.016 (0. p .320 (0.838* (1.E.073 (0.01). 1999). Teo. with online shopping experience (model 1) and Internet buying intention (model 2) as the dependent variables.373) NAT*RISK1 1.790 (1.895) NAT*DSI 1.g.558** (0. That might result in mis-specification of the regression model.156.152) 20. Model 1 is a kind of attitude-behavior model whose dependent variable (shopping experience) is taken place in the past whereas the independent variables are about present attitudes. 1993). p .558.218 (0. nevertheless the practice is adopted in many studies (e.513 (1. S. Korgaonkar and Wolin.007 (0.

In summary. but only 28. we found there are some cross-national differences in experience (action). perceived risk on product. (2000). In other words. higher levels of Internet usage result in increased Internet shopping. Other variables (innovativeness. Korean online users tend to buy online even though they feel privacy and security risk while American users will not.IMR 20.5 546 (RISK1) negatively affects online buying experience in general. Second.3 percent of them making secure connections. 2001). online gaming.01. “iloveschool”. “freechal”. showing that Korean users perceive more privacy and security risk (RISK1) than American users. “hours of Internet use” is positively related to online buying experience.027. and personal communication in Korea (NetValue. meaning that Koreans prefer using the Internet for other purposes. Internet users in Korea tend to spend more time in online communities or communication.430. Discussion Internet usage and Internet buying behaviors Internet usage time is greater in Korea than in the US but there are no significant differences in Internet shopping experience or intention between the two countries. but the relationship is significantly weakened in the Korean sample. Other explanations for the lack of a significant relationship between usage time and Internet shopping experience in Korea are as follows. besides shopping. b = 0. This result is consistent with the results in Table I. p . Korean online users are not risk-aversive but risk-taking. This may explain why there is no significant relationship between Internet usage time and Internet shopping experience. 2001). which is lower than that of western countries (NetValue. One explanation for this is that the Internet is used primarily for the purposes of education. Korea grabbed the top position in the world in terms of e-commerce site access with 78. The popular Web-sites of Korea are community sites such as “Daum”. but at the same time online buying experience (EXP) is almost same for both groups. and length of Internet use) do not interact with nationality. According to Citrin et al. when they purchase online. The analysis of model 2 shows that domain-specific innovativeness and online buying experience affect online buying intention (b = 0. 0. As Korea is a collective society. 0. This may be somewhat related to the high perceived risk among Korean Internet users. representing the actual purchase.01). This result is also consistent with the results in Table I. but this was not supported in our Korean sample. but that no variable interacts with nationality. Consumers are shopping differently depending on whether their motivations for searching are . p . There is another explanation for this. but no differences in intention (attitude). participation in community forums. but less time shopping. involvement in online communities is higher than in any other country.2 percent of its Internet users visiting e-commerce sites. information searching.

Koreans preferred community portals rather than information portals. Goal-oriented shoppers are more interested in buying online than experiential shoppers (Wolfinbargar and Gilly. This means that fewer Koreans tend to trust e-commerce in Korea and that more Koreans perceive high risk in Internet shopping. Koreans tend to trust some malls controlled by big companies. as individualists. Korean Internet users tend to take risks owing to the high innovativeness of Internet and IT. Generally. Furthermore. This fact shows the high Internet innovativeness in Korea. in spite of high perceived risks.. 2001b) and less experience with direct marketing. 1989). but cannot see that they prefer risks. The household penetration rate of high speed Internet (e. Therefore. 1994). and almost all Korean Internet shoppers prefer to buy products at more established malls. the security of online transaction systems and the protection of privacy are important to increase online purchasing. If we classify the motivations for Internet usage using theories of mass communication (Defleur and Ball-Rokeach. somewhat. when they buy online.5 percent.e.g.primarily experiential or goal directed (Babin et al. This seems to be related to the low availability of secure servers (OECD. as collectivists. ADSL) in Korea at the end of 2002 was 67. Perceived risks concerning these two kinds of shopping malls are totally different. Internet buying behavior 547 Perceived risks and Internet buying behaviors The perceived risks of Internet shopping are higher in Korea than in the US. seem to be interaction. but many Koreans have shopped online when the security systems were not good. Although most sites in both top ten lists were portals. there were two shopping sites (eBay and Amazon) in the US top ten list. This means that Koreans take risks. while there were none in the Korean list. Comparing the top 50 Web sites (as of March 2002) of Media Metrix US and the top 50 Web sites (as of April 2002) of Internet Metrix Korea. the highest among OECD countries. despite high perceived risks) since most shoppers purchase goods from large. some differences were found. Koreans seem to take risks in Internet shopping. we notice that there are variances among Internet shopping malls in Korea. . longer Internet usage time among Koreans may not be an influence on their Internet shopping behaviors.oriented whereas Americans. Therefore. Koreans. Why do Koreans show a similar degree of online buying experience (frequency of Internet buying) in spite of higher perceived risks of Internet shopping? First. There should be some discrepancy in the motivations for Internet use between Koreans and Americans. are action-oriented. despite the regression result (i. operated by big companies. rather than independent malls. Second. more-established Internet shopping malls where they feel more secure. high frequency of Internet buying. 2001).

Internet buying will not occur. innovativeness. Because Korea is a collectivist culture similar to China. In fact. it is possible to interpret that cultural traits of Korea cause the risk-taking of Internet shopping. With the increase of secure servers and direct marketing in Korea. mobile phones. Also. thus.g. Collectivism. but there was no interaction effect of culture (nationality) and innovativeness (DSI) on Internet shopping behavior. Hsee and Weber (1988) provided an answer to the cross-cultural differences in attitude toward perceived risk. In their post-hoc explanation. the Korean sample showed higher innovativeness for the Internet than the American sample. if the e-commerce system is not secure and trustworthy. and virtual communities).5 548 Third. instant messaging. they suggested a “cushion hypothesis”. This means that even though Internet innovativeness is high. but no significant differences in online shopping experience and Internet buying intention and between Korean Internet users and American Internet users. Korean Internet users tend to be innovative in using IT communication tools (e. and perceived risks of Internet shopping. a person is expected to bear the consequences of his or her decision. because the number of consumers who has a bad experience with buying online will decrease over time. On the other hand. innovativeness of IT communication tools seems to have no significant relationship with Internet shopping. there were found to be cultural differences in the effects of Internet usage and perceived risks on Internet buying behavior. Although there were effects of Internet . Innovativeness and Internet buying behaviors Just like Internet usage. Internet users in Korea usually think of themselves as innovative because of their heavy use of the Internet. it is expected that the effect of perceived risk on Internet buying will decrease accordingly. in other words as a social diversification of risks. Internet innovativeness may not significantly affect the Internet shopping experience of Koreans. the cushion hypothesis can be an explanation for the results of this research. Another reason is that the high risk perceived by Koreans may offset the innovativeness effect on Internet buying behavior. Conclusion and limitations The study found that there were significant differences in Internet usage. Therefore. (1999) explains that while online consumers are concerned. Therefore. This result could be understood in line with Internet usage time. acts as a cushion against possible losses. Bellman et al. security and privacy concerns are a decreasingly important predictor of shopping behavior. in individualist cultures like America. family or other members will help out any group member who loses a lot of money after selecting a risky option. PDAs.IMR 20. They found that Chinese students were significantly less risk-averse than Americans in their choices between risky options and sure outcomes. arguing that in collectivist cultures like China.

implies that Internet marketers in Korea need to encourage Internet users to convert to Internet buyers. network games) purposes. marketers of independent Internet shopping malls could consider strategic alliances with more-established malls to reduce perceived risks among their customers. virtual communities) and recreational (e. it should consider cultural differences when adopting and applying e-commerce. its adoption and application depends on unique traits of the society. because familiar brands or store names could reduce perceived risks involved in online shopping.usage and perceived risk on Internet buying behavior. Therefore. shopping orientations and vendor characteristics. Eventually. for example. but that usage is not related to Internet buying. There are some omitted variables relating to Internet shopping in the model. Even when the same information technology is introduced. convenience sampling weakens research objectivity. As Korean Internet shoppers prefer big and noted shopping malls where they feel more secure. Limitations and further research This study has some limitations owing to its exploratory stage. the effects were weaker or even opposite in the Korean sample compared to the American sample. proper cultural transformation in international marketing will be necessary.g. More scientific sampling will be required for further research. Managerial implications The finding that Korean online shoppers take risks offers some marketing implications. 1996). the biggest online community site in Korea. sales from of shopping malls rapidly increased to 73 percent in 2001 from 28 percent in 2000. and interest towards communities of transaction (Armstrong and Hagel.daum. This means foreign Internet shopping malls might be more successful if they align with famous Korean shopping malls in developing a Korean target market. A comprehensive model of Internet buying behavior will be Internet buying behavior 549 . Some scales were measured in minute increments. while the portion of online advertising decreased to 21 percent in 2001 from 54 percent in 2000 (Yonhap News. net). though Internet marketing has some merit in targeting global customers. and presents several challenges with respect to theory building and methodology. For example. in Daum (www. 2003). This shows that community sites in Korea are trying to develop e-commerce transactions. even in the Internet age. Internet marketers should develop strategies that lead them from communities of fantasy. The finding that Internet usage time is greater in Korea. As Koreans use the Internet for social (e. Recently. discount pricing or convenient purchasing processes should come prior to protecting personal information or security for payments. It might be important to develop a marketing strategy for promoting Internet shopping rather than to improve secure e-commerce systems.g. Furthermore. Advanced technology and international standardization are not particular to a locale. relationship.

and Bamossy. pp. Armstrong. perceived risks and Internet buying behavior will be needed for a more accurate explanation of cultural differences in Internet buying behaviors. (1996). 15 No. Theories of Mass Communication. Bottom. Vol. Journal of Consumer Research. Costa. References Aaker.IMR 20. and Bamossy.P. (1994). D. G. 13. Cheng.T. Sage Publications. 134-41. Bellman.J. D. 1. Journal of Advertising Research. Vol. F. Jr.. 4 No. (1986). Nationalism. 177-82. and Ball-Rokeach. “Cultural dispositions and conformity to peers”. H. Newbury Park. pp. M. 319-39. MIS Quarterly. 1. 25. S. F. (1998). Qualitative Market Research: An International Journal. (2000). J.J. “Cross-cultural differences in risk perception: a model-based approach”.A. J. (1989). 550 . and Internet shopping behavior”. Vol. 20. Darden. “Reducing staus effects with computer-mediated communication: evidence from two distinct national cultures”.. Becker. 3. pp. MIT.E. 75-92. Misra. (1999). MA. Lohse. doctoral dissertation.M. J. pp. R.L. convenience.-K. Cho. International Journal of Intercultural Relations. Korean Journal of Social and Personality Psychology. L. “A technology acceptance model for empirically testing new end-user information systems: theory and results”. “Reasons for the lack of argumentation and debate in the Far East”. 15 No. perceived ease of use. and Flynn. (1995). (2000). Vol. (1989). III (1996). J. K.. A. P. 294-300. 27-45. and Kim. Tan. G. Journal of Management Information Systems. Cambridge. W. 139-65.. and Johnson.L.R. “Internet marketing research: opportunities and problems”. Bhatnagar.V. Vol. Furrer. New York. Bontempo. Sloan School of Management. R. (1986). and user acceptance of information technology”. Babin. Risk Analysis. 4. Wei. 98-105. “The real value of on-line communities”. Association for Marketing Theory and Practice Proceedings. Communications of the ACM. Harvard Business Review. G. J. E. M. H. (2001).. Silverman. 17 No. (2001). 3. In addition.N. pp. E. Vol. “Work and/or fun: measuring hedonic and utilitarian shopping value”. pp. S. and Hagel. 32-8. (1995). C.N. (1997). “On risk. NY.E. Vol. 36 No. D. pp. A. 11. Davis. G.Y. “Empathy versus pride: the influence of emotional appeals across cultures”. B. 479-88. 4.D.U. “The domain specific innovativeness scale: theoretical and practical dimensions”. 1. pp. Sprott. 64-656. Vol. (Eds). “Cultural values reflected in Chinese and US television commercials”.R. 100 No. S. Vol. Defleur. W. “Predictors of online buying behavior”. 119-41. pp. Industrial Management & Data Systems. 10 No. 123-9.. and Walczuch. December.C.E.A.J. Vol. (1998). and Sudharshan. 12. pp. and cultural identity”. Citrin. Communications of the ACM. and Weber. pp. A structural equation model is needed to attempt to identify the exact causal relationship among variables. pp.J. R. “Perspectives on ethnicity. B. pp.C. A. “Adoption of Internet shopping: the role of consumer innovativeness”. 42 No.J. in Costa. May/June..L. “Perceived usefulness. pp. S. 7. 241-61. CA. and Stem. finding and identifying new mediating variables between Internet usage. Marketing in a Multicultural World: Ethnicity. and Williams.R. Vol. and Rao. Longman. and Griffen. Watson.5 required for further research.D. 3-25. Goldsmith. pp. O. Davis.. R. and Cultural Identity. 43 No. and Schweitzer. Vol. E. nationalism. Vol. Journal of Consumer Research. pp.

69-96.F. D. Y. Kleinhesselink. (1999). Journal of Behavioral Decision Making. pp.pdf NetValue (2001).K. 2. Korea Boasts the Highest E-commerce Site Usage in the World but the Actual Purchase Rate is Low. December. 349-61. C. Journal of Computer-Mediated Communication. (1980). 2.ascusc. S. and Wicckowshi. 5 No. Gudykunst. Sage. “Cross-national differences in risk preference and lay predictions”. Vol. (1980). Korean Social Science Journal. Journal of the Academy of Marketing Science. Hofstede. March-April. Journal of Advertising Research.org/jcmc/vol5/issue2 /jarvenpaa.htm OECD (2001a). T. 15 No. 3. Vol. 2. Beverly Hills. press release.C.Goldsmith. “Innovativeness: the concept and its measurement”. E. “High. and Johnson.html Lohse. Bellman. (1999). 7.L. 22.netvalue. pp. Psychology & Marketing. Cheng.org/sti/ consumer-policy OECD (2001b). G. Communication in Personal Relationships Across Cultures. Hofstede. 15-29.oecd. W. Cultures and Organizations: Software of the Mind. “The impact of perceived channel utilities. S. 2. G. Kim. Internet buying behavior 551 . (1999). pp. McGraw-Hill. pp. and Shin. Vol. pp. M. Sage.. G. Jarvenpaa. December.K.versus low context culture: a comparison of Chinese. M. (1984). and demographics on the consumer’s online buying behavior”. E. Igbaria. N. 1/2. pp.U. “Consumer perceived risk: conceptualisations and models”. 6. novelty seeking. S. Vol.B. “Measuring consumer innovativeness”. G. 14 No. Vol.J. Vol. Journal of Consumer Research.. 159-75.L. “Innovativeness. Vol.S. and consumer creativity”. “The respective roles of perceived usefulness and perceived fun in the acceptance of microcomputer technology”. Journal of Interactive Marketing. Vol. available at: www. (1991). “South Korea dominates Asia pacific Internet activity: global index”.G. 283-95.F. 19 No. available at: www. (1999). 229-42. 11-28.com/corp/presse/ cp0033. CA. L. “Business-to-consumer e-commerce statistics”.. 53-68. E. available at: www. (2000). (1978). 5 No. pp. London. “Cognitive representation of risk perceptions: a comparison of Japan and the United States”. 33 No. Cultures Consequences. “A multivariate analysis of Web usage”. 13 No. Midgley. and Russell. R. (1994). and Park.. “Consumer trust in an Internet store: a cross-cultural validation”. Ting-Toomey. available at: www. pp. and Rosa. H. “Concurrent validity of a measure of innovative cognitive style”. and Dowling. Berlin. P.J. and Hofacker. Business-to-consumer electronic commerce. (1998). available at: www.. S. and Tractinsky. 4. March 13. June 28. (1994). Consumers in the Online Marketplace OECD Workshop on the Guidelines: One Year Later. (1991). (1999). S. pp. and Vyas. and Nishida. shopping orientations. Thousand Oaks.htm Joseph. 27 No. 2. 6.A. Hsee.R. pp. 1. Journal of Cross-Cultural Psychology. (2000). D. V. (1996).nielsen-netratings. and Wolin. Vol. 12 No. 163-95. Nielsen//NetRatings (2002). Journal of Consumer Research.ascusc. C. Journal of the Academy of Marketing Sciences. Vol. B.D. European Journal of Marketing. T. 209-21. pp. Korgaonkar. Mitchell. S.. 165-79. “A cultural profile of Korean society: from vertical collectivism to horizontal individualism”. Korean. Hirschman.J.S. org/jcmc/vol5/issue2/ hairong. Han.com/pr/pr_020313_hk. 12 No. Schiffman. H. and American cultures”. K. R. Journal of Computer-mediated Communication. CA. E. Behavior and Information Technology.R. 13-14 March.E. Vol. and Weber. “Consumer buying behavior on the Internet: findings from panel data”. Li. pp. 507-21. Vol. press release. G. Pan. Vol.

“Shopping online for freedom. FL. Lim. May-June. Promotion Management and Marketing Communications. Vol. pp. (1993). R. (1998). E. (1979). 125-37. 22. “The Internet and international marketing”. February. 43 No. Teo. 95-100. 2. E. Computers in Industry. Sloan Management Review. 4. in Bond. Wang. 24 No. T. R. 134-41.K. (1997). Omega. M. Skeenkamp. “Exploring the implications of the Internet for consumer marketing”. pp. and fun”.C. and Lai. Journal of Interactive Marketing. 2. (1999).U. Tse. (1993). Rogers.G. and Jagel III. Vol. Oxford University Press..org/jcmc/ vol5/issue2/swaminathan. 43. Shaninger. F.H. V. pp. (1996). 12 No. 2. 44 No.Y. 9. and Ahuvia. Management Science. pp. R.. but cross-cultural similarities in attitudes towards perceived risk”. 25. “Perceived risk and personality”. Spring. Point Topic (2002). (2001). “Issues and advances in international consumer research: a review and assesment”.R.A. 3. Journal of Consumer Research. V. Zeffane. pp. B. E. pp. “Understanding Chinese people as consumers: past findings and future propositions”. Vol. 29-346. pp. and Klein. control. The Handbook of Chinese Psychology.A. p. and Gilly. “A cross-national investigation into the individual and national cultural antecedents of consumer innovativeness”. International Journal of Management Science.U. and Hsee. (1997). (1996). J. 25-37. available at: www. and Bronnenberg. “Cross-cultural differences in risk perception. Wong. Management Science.P. Journal of the Academy of Marketing Science.S. Yonhap News. 53-69. Weber. 34-55. Hofstede.. T. J. B.Y. 5 No. S. L. Quelch. NY. Vol. and Rao. “Perceived risk attitudes: relating risk perception to risky choice”. Internet Research: Electronic Networking Applications and Policy.M. C. (1996).M. (2001). “Korean dot-coms hit record high revenue in 2002”. Diffusion of Innovations. Journal of Marketing. and Cheek. Vol. and Wedel. 63. (1976). T. Vol. E. Journal of International Marketing and Marketing Research. Wolfinbargar.G. . Journal of Marketing Research. (1999). 423-41. N. The Dryden Press. Psychology & Marketing.IMR 20. J. 122-43. September. Peterson. S. (1998). Vol. 11 No. C.P. “Browsers or buyers in cyberspace? An investigation of factors influencing electronic exchange”. Vol. “Profiles and correlated of computer usage: a study of the Australian telecommunications industry”. 15 No. Balasubramanian. pp. 1. January 17. pp. Teo. Vol. Swaminathan. pp. 5-21. “Reliability: a review of psychometric basics and recent marketing practices”. Harvard Business Review.ascusc. 5.. Samiee. 3-21.html Armstrong. Lepkowska-White.5 552 Peter. pp. DSL Worldwide Retail Directory. Orlando. California Management Review.C. Shimp.L. pp.J. and Milliman. 27. 60-75. Vol. 4. pp. “Intrinsic and extrinsic motivation in Internet usage”. Vol. M. (1998). B. (Ed. J. Yonhap News (2003). Journal of Computer-Mediated Communication. (1998). D. Vol. A. M. New York. “Personal taste and family face: luxury consumption in Confucian and Western societies”. 6-17. “The Internet and international marketing: is there a fit?”.C. 1205-17. The Free Press. “The real value of on-line communities”. Vol.). pp. “Demographic and motivation variables associated with Internet usage activities”. R. 55-69. (1999). M.H. Weber. A. pp. Hong Kong. C. (1983).

pp. J. “Is there a future for retailing on the Internet?”. J.01 20.214 20.661 4. K. and Baumgartner. M. N. Journal of Retailing. in Electronic Marketing and The Consumer. To buy a product from web retailers would be a high potential for loss 20.024 Eigenvalue 2. and hesitate to use them 0.024 9. I am an early adopter of Internet among my friends 0.L. I am not sure of Internet payment systems. S15-S20. 284-97.854 0. P. I do not feel safe exposing my personal information when I buy goods online 20. 82. Szymanski. store satisfaction and store loyalty”. (1998). “Risk perception of prescription drugs: report on a survey in Canada”. and Ruyter. 32 No.M. CA. Internet buying behavior 553 Appendix Items DSI RISK1 RISK2 1.0 20.792 2.868 1. I know new Web sites on the Internet more than my friends 0. 309-22. RISK1 and RISK2) .A. Jarvenpaa. and coping styles”. Vol. Skeenkamp. and Nakone.20 13. P. D. 139-54.037 0.193 0. 20. pp. Lappe.52 Variance explained (%) 28.. Sage. (2000).061 1. 25.. Y. Journal of Cross-Cultural Psychology.168 0. I try to visit it 0. Factor analysis of measurement items (DSI.511 6. pp. 24. Web retailers’ product information is generally not trustworthy 0. Mann. 5/6.209 0. 3. R. “Assessing measurement invariance in cross-national consumer research”.89 21. “On the relationship between store image. Newbury Park. European Journal of Marketing.124 20.011 8. Vol. (1991). and Todd. “E-satisfaction: an initial examination”.3 Table AI. Vol. Canadian Journal of Public Health. H. Ohta.884 0.138 7. Vol. S. pp. H. Y.. Slovic. pp.155 0. pp.T.873 0. and Majors. Journal of Consumer Research. “Difference between Australian and Japanese students in decisional self-esteem. (1993).0 Note: Rotation method: Varimax with Kaiser normalization .633 5.N.269 20.047 0. 78-90. L. 76 No. I didn’t want to use the Internet until others started using it a lot 20.118 0.720 3. 499-513. Kraus. Vol. and Hise. M. (1998).114 20. I seldom visit a new Web site with which I am not familiar 20.Further reading Bloemer.128 20. When I hear about a new Web site. Radford. (1997).. decision stress.

Louis University.5 554 The effect of FDI inflows and ICT infrastructure on exporting in ASEAN/AFTA countries A comparison with other regional blocs in emerging markets Taewon Suh Department of Marketing. the impact of the increase of FDI inflows on export is significant only in the CEFTA and LAIA samples. San Marcos. be rationally assumed to exhibit similar traits to Slovakia or Nigeria? While clearly not all EMs exhibit homogeneity in characteristics and attributes. These results are discussed in the light of the different economic experiences of these trade blocs. 554-571 q MCB UP Limited 0265-1335 DOI 10.The Emerald Research Register for this journal is available at http://www. 20 No. noting that variations are typically present between individual countries. can an emerging economy like Brazil. The results show that the increase of investments in ICT infrastructure yields positive and significant returns in the national exporting level only for the ASEAN/AFTA and CEFTA sample. Missouri. for example. St. St. thus yielding greater validity in applying research results. Texas State University – San Marcos.emeraldinsight. Any cursory overview of the global economy. it is useful to place individual countries within relevant trade bloc . College of Business Administration. Louis. Khan Boeing Institute of International Business.1108/02651330310498780 Introduction Emerging markets (EMs) constitute the major growth opportunity in the evolving world economic order (Arnold and Quelch. however. Texas. and Omar J. USA Keywords Foreign exchange options. Overall. in place of the ubiquitous “emerging market” designation. The needs are clear to study these markets in more regional groupings. John Cook School of Business. research concerned with the determinants of national exporting level should be conducted independently. Export markets. 2003 pp. along with regional and national characteristics.emeraldinsight. 5. After all. The analyses are based on data from a cross section of countries (26 emerging markets from three trade blocs) over time (from 1995 to 2000). Globalization Abstract This paper explores the impact of both the increase in foreign direct investment inflows and the increase in information and communication technology infrastructure investments on exporting in ASEAN nations (the trade bloc of which is known as AFTA) compared with two other major trade blocs: CEFTA and LAIA. reflecting the results from this study. indicates clearly that these markets are by no means homogenous.htm IMR 20.com/0265-1335. 1998). Interestingly. USA. International Marketing Review Vol.com/researchregister The current issue and full text archive of this journal is available at http://www.

Our contention to begin the paper is that studying all EMs together under one designation is too broad a stroke. we use as our canvas three regional blocs. in fact. few and far between. 1996) and at the country-level (Dominguez and Seqeira. particularly in an emerging market context. As a former Under Secretary of Commerce. 1995). Thus. and strategic implications (from both the firm and commercial policy-makers point of view) are drawn. 1996).. After all. While the growth and prevalence of regional economic blocs has itself increased the need for firms to internationalize and establish presence therein (Monye. academic studies have lagged in conceptualizing market entry parameters across trade blocs. We believe this to be a serious oversight in the literature that needs to be rectified. Academics have also exposed the inherent value of gearing studies across such multiple country group contexts (Craig and Douglas. Comparisons are made between these three groupings of EMs. or viewing China as an integral part of the greater Chinese economic area (Tateisi. Regional economic integration. (2001) and his colleagues mention. 2001). directing such policy initiatives to ASEAN countries as a whole rather than to Indonesia specifically. studying effects at the trade bloc level inherently controls for the differing Exporting in ASEAN/AFTA countries 555 . In studying some established parameters across several well-established trade blocs. 2000. country-group context. A cursory scan of the literature reveals that studies outside of a one-country context are. multiple. 1992). As Buckley et al. From a research standpoint.. that is. The primary contribution of our research is that we focus in on the effect of ICT infrastructure and foreign direct investment (FDI) inflows on exporting within three emerging market trade blocs – thus forming a useful. Garten (1996) finds great support for directing commercial and economic policy considerations towards trade blocs rather than just concentrating on the individual nations that comprise them. in order to provide us with greater within-group homogeneity. for example. Holzmuller and Stottinger. It provides the opportunity for within-group firms to expand their operations locally and utilize the immediately accessible markets. as exemplified by trade blocs. rather than across single countries. and the individual countries within such groups can reap the resulting size-of-country benefits (Buckley et al. In this study. our study directly provides just this kind of across-bloc insight and implications. firms implementing market entry strategies into single-country EMs must be aware of the subsequent opportunities and pitfalls of the relevant trade blocs they may be entering.contexts. while single country analyses may limit generalizability. has the effect of increasing “size of the country”. 1996). since countries vary in size. studies of the effect of information communications technology (ICT) infrastructure on exporting have been lacking. Whereas previous studies have been plentiful in both the area of export performance at the firm-level (Katsikeas et al. it also motivates “outsider firms” to become “insider firms”. its importance to the economic experience cannot be overstated.

We. The reasoning behind the selection of the particular country blocs used in our study is that: . . thus. all of them reflect countries which are considered EMs. . Economically. thus. similar economic conditions. and . there has been a proliferation of free-trade bloc formation over the last two decades. Trade blocs offer increasing “size-of-country” benefits. Despite the advantages of cross-bloc analyses. . shared political breakthroughs. and our study fills in this important gap in the literature while comparing the effects of FDI inflows and ICT infrastructure on exporting in ASEAN/AFTA trade bloc with those in CEFTA and LAIA. .5 556 effects a larger country may have on the region as opposed to a smaller one. ASEAN/AFTA compared to CEFTA and LAIA With steady progress from supranational agencies like the GATT and its evolutionary offspring. and can provide a means to countervail individual country size distortions when comparing multiple countries. of which a market-entering firm needs to be mindful. they possess within-group similarities (both economically and socially). The needs for cross-trade bloc analyses are. multiple text references in the existing literature One of the newest regional trade blocs to form in Europe. and used by. and geographical proximity) (Czinkota et al. combined with organically blossoming free-market ideals. the WTO.. believe that studies across these distinct country groupings provide for great theoretical generalizability. clear. while still maintaining significance in the validity of findings. rather than individual countries. 2000). Summarizing from the preceding discussion why an analysis by regional blocs is relevant and necessary. Such analyses provides greater generalizability than single-country analyses. Increasingly. A country’s membership in a regional bloc opens up corresponding opportunities and pitfalls. the seven-member .IMR 20. national trade policies and agreements are directed towards a regional bloc as a whole. Not coincidentally. and are in differing stages of development. these blocs have tended to form among nations who share certain core characteristics (like common language. there remains a clear gap in the literature that needs to be filled. allowing them to be differentiated prima-facie from one another as groups. . they are well-established groupings familiar to. was created in 1993 by countries that had only recently acquired free market persuasions. we distill the following major points: . the Central European Free Trade Area (CEFTA).

to reflect the emphasis on comparison of trade blocs (note: the composition of the country group is exactly the same either way). have experienced recovery and continue to do so (Bartels and Freeman. With the constituent countries experiencing greater than average (i. this potential utility will likely grow rapidly in the future (Wilson and Mei. we will refer to this group of countries as ASEAN/AFTA rather than ASEAN.e. It should be noted that while LAIA’s stated objectives go beyond the promotion of free trade among member nations. The trade bloc of these countries is called AFTA. represents a massive market which has not yet been fully utilized. and this has recently brought ASEAN into the focus of interest as a potential market and host of FDI. these objectives have been largely not met. Through the remainder of the paper. However. Created with the vision of harmonization of economic activity among member states. One need only point out the recent demise of Argentine market emergence to highlight the dramatic challenges faced by this projected integration. a common Latin American market – much along the lines of the EU. a formal integration process has been initiated in the region. 2000). these countries. In reality. and continue to be in Exporting in ASEAN/AFTA countries 557 . 1997). It is observed that the ASEAN/AFTA countries have stood up to the tribulations of the crisis. Like Europe. Certainly. Also. Our third country grouping – and the primary focus of our comparative analysis – is the major multinational trade group in Asia. and a slowdown in inflationary trends among members since the bloc’s inception (Czech News Agency. overall. The Latin American Integration Association (LAIA) proposes. seeing growth in GDP. As the replacement to the now defunct LAFTA (Latin American Free Trade Agreement). there were stumbling blocs along the way (witness the Asian economic crisis of the late 1990’s). and provides us with a group that exhibits some useful commonalities among member states. During the last few decades the member countries of the Association of the Southeast Asian Nations (ASEAN) have displayed an extremely high growth rate. falling unemployment. as its long-term objective. with the operating goal of encouraging free trade among its member nations. ASEAN/AFTA. along with the wider Asian continent. Currently. 2000). primarily from the varying experiences of development among its 11 member states. this regional bloc operates most effectively as a trade bloc. 1999). ASEAN also exhibits within-group similarities (Cateora and Graham. world average) growth over the last few decades. LAIA has become a labyrinth of bilateral trade agreements between its member states.CEFTA can be considered a relative success.e. i. the ASEAN Free Trade Association. called the Association of Southeast Asian Nations (ASEAN). with its more than 450 million people. this regional bloc represents an operating and well-established trade bloc in Latin America. and has experienced bumps along its path to economic union. the Americas and Asia are no exception to the growing number of regional co-operative groups.

and feedback from the export market. when studying the effect of any one particular variable on exporting. and it is with this view that we explore the effects of the development of infrastructure that will facilitate these high-tech exports within a country. The impact of FDI inflows and ICT infrastructure FDI represents a great opportunity for emerging economies. and a circular cause-and-effect relationship results. This becomes the primary variable under investigation in this study. 2000). we must account for the effects of other determining factors as well. For example. The Latin American countries may. and is referred to as ICT infrastructure. And they are better able to do so with the added revenues from increased exporting activity. when compared to the other two blocs in our study. and thus host countries need to provide this “bait”. 1993). A look back at the well-documented determinants of the national level of exports is warranted. data. Much of this growth is attributable to the promotion of export expansion in order to achieve global competitiveness (World Bank. the countries of ASEAN/AFTA have had far longer (and more substantial) experience in the exporting of component parts and finished consumer goods. have greater experience in the export of primary products. While there is . Christopher Carr (1993) highlights the importance of manufacturing policies as primary sources of sustainable competitive advantage in a market economy. 1984).5 558 growth mode. Significant research exists on the determinants of export performance (Lages. 2000. to improve their balance of payments picture through increasing exports. These differing characteristics between the trade blocs can provide competitive advantages for one bloc over the other in the global marketplace. Research framework An export marketing plan for an emerging nation can work in a qualitatively similar manner as an exporting plan for a multinational firm. It is thus likely that their infrastructure and institutions are more tuned in with an exporting philosophy than the CEFTA or LAIA nations. or penetrate markets (Kogut. favorable manufacturing policies could be argued to provide a competitive advantage for the ASEAN/AFTA countries over either the CEFTA or LAIA nations. Firms go overseas in order to extract raw materials. It has also been shown that promoting high-tech exports has a positive effect on the amount of FDI flowing into a country (Wilkinson and Brouthers. Kumar. like those of ASEAN. Consequently. further capital can be attracted from abroad. in turn. In addition. 1966). the plan must be reviewed and revised constantly as the nation acquires more experience. 1994). therefore. to paraphrase Cavusgil’s (1993) prescription. and the positive effects of FDI on a country’s level of exports are well known (Vernon.IMR 20. After all. source production. while the Central Europeans may be more proficient in exporting products requiring a highly educated labor class.

countries become more in tune with global market trends and are able to gear their exporting activity to higher demand sectors. For example. Although a high-tech sector is great for a poor country’s prestige. investment in the Internet would directly benefit exporting.much greater support for FDI’s positive effect on exporting in the existing literature. In addition. Dewan and Kraemer (2000) reported that returns from ICT capital investments were estimated to be positive and significant only for the developed countries in the sample. FDI can play a key role in improving the capacity of the host country to respond to the opportunities offered by global economic integration. However. FDI directly affects a country’s exporting activity when the purpose of the FDI is to utilize host country comparative advantages and sell in other national markets (Hymer. 1993). Thus. Will the increase in FDI inflows positively effect exporting in EMs? Will the three trade blocs show similar effects in terms of this relationship? There is one stream of research on the efficiency of ICT. 1982) by improving on the array of resources it has to offer. Roach. and we further contribute to this understanding by testing directionality in the discussion section of our findings. 1990). the so-called “productivity paradox of information technology”. For example. There are conflicting results on this matter. 1998). 1996). and may wish to offer investment incentives to encourage FDI by outside firms (Motta and Norman. This leads us to our first research question: RQ1. On the flip side. 1998). Integrating economies are more likely to gain from improving intra-regional market accessibility (which leads to export-oriented FDI) than from tougher external trade policy. we expect that although overall lack of some complementary factors may bar the infrastructure from contributing sufficient influences to general national productivity in those markets. investments in ICT infrastructure in EMs may influence a particular part of the economy (in this case. Brynjolfsson. a goal increasingly recognized as one of the key aims of any development strategy (Financial Market Trends. improve its relative bargaining power with foreign multinationals in the conduct of direct investment (Fagre and Wells.g. we are also presented with the need for further clarification of the direction of causality between exporting and FDI. exporting). since an Internet-based source of export market information can provide tremendous help to export-oriented small and medium sized companies Exporting in ASEAN/AFTA countries 559 . the benefits to exporting activity from increased FDI far outweigh any potential downsides. however. it may not do all that much for the economy. An emerging economy can. Thus. developing countries’ governments are often concerned that too much dependence on inbound foreign investment may lead to an eventual unacceptable erosion of the country’s sovereignty (Dunning. 1991. 1976. which questions the contributions of ICT to economy-level productivity and growth (e. Porter.

so effectively do the goods it manufactures or produces (for foreign markets. indicated by penetration of computers. we do not specify any expectation on the differences between the trade blocs in terms of this relationship.. Internet hosts. in turn. 2001). 1988). 1999). Incentives need to be provided to nurture competitiveness and also promote domestic investment. Domestic investments in ICT infrastructure. and devaluation of the national currency has been often used as an instrument to promote the export level (Froyen. 2002. diminish over time as the nation realizes the economic gains through exporting. 1999). that is). are sometimes designed to enhance the level of exporting. and so this factor is presented as a control factor in our present investigation. Yarbrough. 1998). quite clearly it is a factor that needs to be controlled for in our current study. are a double-edged sword. and unfavorable exchange rate can have a directly detrimental effect on exporting (Chaoshin et al. It must also be noted here that emerging countries tend to see great turbulence in their political climate (Drabek and Laird. in that it helps determine net revenues and affects the profitability of both domestic and foreign firms entering the host country (Abel and Bernanke. and thus positively affect exporting. we expect that an increase in investment in ICT infrastructure will boost exporting in EMs. 2001). stability can and should be maintained in at least the policies affecting the exporting level of the country.IMR 20. Even though this tactic has often led to adverse effects on the domestic equity markets (Doukas et al. Failure to do so may restrict the generalizability of significant results found herein. Political upheavals caused by the new liberalism of EMs may. Thus. the potential benefit to exporting firms of favorable exchange rates cannot be ignored. Exchange rates. Firms operating in countries with friendly corporate tax rates tend to exhibit significantly stronger export performance (Bagchi-Sen and MacPherson.. Will the increase in ICT infrastructure investment have a positive effect on exporting in EMs? Will the three trade blocs show similar effects in terms of this kind of relationship? Covariates There are a number of factors which we must control for in order to focus on the major objectives of this study.5 560 (Williamson. This will. But owing to the exploratory nature of this research. While it may not be possible to maintain overall political stability with the often finicky populace wanting to see immediate results. of course. the following: RQ2. We offer as our second research question. it has become widely accepted knowledge that when a particular country’s currency becomes “cheaper”. The corporate tax rate comprises a major incentive. . in fact. Thus. promote FDI. 1999). Exchange rates also have a direct effect on the level of exporting in a country. and telecommunications in a nation. Certainly.

productivity. ICT infrastructure development. Bartlett and Ghoshal (1989) found differences in local infrastructure development to be a major component of performance differences among countries. Market openness should. in and of themselves. It is clear. labor costs are a key driving factor in export oriented FDI. This is because productivity directly promotes cost effectiveness and. thus.. is of paramount importance for countries intent on achieving exporting success in today’s technology driven markets. however. etc (Lee. we find that infrastructure development serves the major facilitating role in reaching higher levels of exporting. Thus. 1997). 2000). This would imply. 2000). it becomes a circular cause-and-effect phenomenon. And productivity becomes a variable to control for in our study. which was measured as the rate of increase of the trade ratio. which should be welcomed by countries seeking to become players in the global marketplace. A powerful ally for responsible governments in emerging economies can be private infrastructure investment at the sub-national level. But even. Real wages in the sense of labor cost also are influenced by productivity (Seguino. as well as growth. therefore. from the literature that labor costs affect exporting activity. 1997). and that again – in circular fashion – would promote exporting.Another principle determinant of national export level. relates directly to the concept of efficiency at the firm and industry level. it is a factor we control for in this paper. profitability – providing the prime incentive for exporting activity (Tiratsoo and Tomlinson. in particular. The openness of the economy is related. Exporting in ASEAN/AFTA countries 561 . Here. Studies have shown that. 1999). quite obviously. In other words. to the emergence of a market economy. be monitored when the country-level study includes non-emerging countries. the focus is on market efficiency (Rockinger and Urga. whether through export oriented FDI or domestically initiated production. but this direct relationship is often moderated by other country-specific factors such as skills. It is the responsibility of every nation’s government and its people to ensure that infrastructure has developed to the extent that private enterprise may be competitive and efficient. 2000). Often. and related to all the determinants of exporting success. foreign firms wish to take advantage of a cheap labor pool within a country in order to establish production facilities there – but market their products elsewhere. Through the previous discussion. that FDI inflows would be positively effected by greater market openness. Where this improves. Thus. at least in the long run. Siebert (1999) found that economic growth is related to the openness of economies. operating with transparency and disclosure (Beato and Vives. geographical proximity. a labor cost advantage is directly related to exports (Ghosh et al. at least at the conceptual level. and the latter is naturally a necessary component to accelerate exporting. it is infrastructure conditions which themselves promote productivity. the other factors tend to follow.

we eliminated this potential “noise” from affecting an analysis such as ours – i. Colombia. Hungary. Chile. i represents each sampled country. and the International Telecommunication Union. as identified by this and previous research. since intra-regional trade depends on the specific terms of the trade agreements – and AFTA. Peru. RB de Venezuela Table I. MO is market openness. Brazil. This can be legitimately rationalized since there is Trade bloc ASEAN/AFTA CEFTA Country name Bruneia. we excluded intra-regional trade from our analysis. The analysis was based on data from a cross section of countries (26 countries) over time (from 1995 to 2000). the World Bank. Cambodia. Ecuador. Thus. Vietnam Bulgaria. between regional blocs. Malaysia. Thailand. Uruguay. 1 is error. Slovenia Argentina. Mexico. The definitions of all the variables are presented in Table II. Singapore. Paraguay. are represented by the regression equation below. CEFTA and LAIA have differing trade arrangements among member states.5 562 Research methods Data for this analysis is derived from various sources such as databases from IMF. LC is labor costs. Romania. national wealth indicators such as GDP per capita and GDP are thrown out from our model because of high degree of correlation (causing a multicollinearity problem). Our hypothesized independent variables explaining exports. Also. The Czech Republic. Bolivia. EXP is exports. the Slovak Republic. Countries by trade bloc included in the data LAIA Note: a Countries excluded owing to unavailability of data . Poland. The Lao PDR. The Philippines. for a total sample size of 156 Table I shows the emerging countries by trade bloc included in our data set. and t represents each year. This study aims at explaining the dependent variable exports using two focused independent variables and four control variables selected on the basis of their importance. FDI is net FDI inflows.IMR 20. based on a review of the theoretical and empirical literature and on the ideas we presented above in our theory section. PD is national productivity. TR is tax rate. ER is exchange rate. Indonesia. Two countries in ASEAN/AFTA (Brunei and Myanmar) were excluded because of data unavailability. ðLog EXPÞit ¼ b0 þ b1 ðLog FDIÞit þ b2 ðLog ICTÞit þ b3 ðLog PDÞit þ b4 ðLog ERÞit þ b5 ðLog LCÞit þ b6 ðLog TRÞit þ b7 ðLog MOÞit þ 1it Even though a nation’s wealth has been used as a common explanation for exports. Myanmara.e. ICT is information and communications technology infrastructure.

Findings Model fit Model fit with each censored sample was quite acceptable (R 2¼[0. GDP may be less important here because each country is represented in terms of regional economic integration. This explains why analyses by regional trade bloc are relevant . R 2 ¼ 0. with all F values significant). in industry establishments Corporate tax rate: the highest rate shown on the schedule of tax rates applied to the taxable income of corporations Market openness: the sum of exports and imports of goods and services as a share of GDP Exporting in ASEAN/AFTA countries 563 Table II. and mobile phones (all in density term) Productivity: obtained by dividing the value added of industry establishments by the total payroll Exchange rate: the actual. few separate regression models were run. Also.72. we log-transformed each variable to fix the heteroskedasticity problem and employed a first-order autocorrelation procedure to correct the potential problem of serial correlation. or the number of people engaged. The first two analyses include full sample (Table IV). Because of the cross-country and time-series nature of the data. 0. principal exchange rate. 2.52).77]. an annual average based on monthly averages (local currency units relative to US dollars) Labor cost: obtained by dividing the total payroll by the number of employees. fourth. Definitions of variables evidence of positive correlations between technological and innovative factor (that is ICT) included in our model and the economic development and growth level around the world (Saunders. However.Variable name EXP FDI ICT PD ER LC TR MO Definition Exports: comprising all exporting transactions between residents of a country and the rest of the world ($ million) Net FDI ($): net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor ICT infrastructure: a composite variable composed of standardized indicators such as of Internet host. The third.19]). To test the hypotheses. 0.93]. the range of variance inflation factor ¼ [1. on its own. telephone mainlines. 1994). ICT configuration nicely replaces the level of economic development in our model.30. when pooling the entire data set. personal computer.46. No variables in our model violate the common cutoff thresholds of multicollinearity measures (the range of tolerance value¼[0. and fifth models are censored to test each trade bloc sample. the explanatory power of model drops steeply (refer to full model 2 in Table IV. The correlations among independent variables and other descriptive statistics are shown in Table III.

75 0. an increase in investments from foreign countries was significantly associated with an increase in exporting in the full sample (refer to full model 2 in Table IV). and correlations between independent variables 1. in the full sample.11 2 0. and the R 2 changes from the original model (full model 2) were also significant. the results from the three trade bloc models show that the influence of increasing ICT infrastructure investment was significant in the ASEAN/AFTA and CEFTA sample and not in the LAIA sample.36** 2 0. Means. in the censored samples.00 2 0.79 3.32 0.51** 0.21 1. the increasing investments from foreign countries showed a significant relationship with exporting only in the CEFTA and LAIA samples and not in the ASEAN sample. the increase of investments in ICT infrastructure affects exporting only for some ASEAN/AFTA and CEFTA countries. deviations. Also.16* 0. Results Regarding RQ1.46** 2 1. However. As shown in Table IV. We do need a more sophisticated discussion here other than the simple.00 SD 0.02 2 0.54 1.04 0.84 9. Discussion As we take a look at the results from the three trade blocs individually. returns for national exporting level from ICT investments are estimated to be positive and significant only for the ASEAN/AFTA and CEFTA sample.00 0.02 1 1. regarding RQ2. although we report the results from the full sample.00 2 0.03 1.50 1. *indicates significance at 0. our major focus is given to the results from each censored sample. The CEFTA and LAIA dummy were significant. **indicates significance at 0.42** 0.11 0.28 0.05.12 2 0. Also.11 0.01 . Therefore.24** Note: All variables were log-transformed.04 2 0.00 2 0. Variable PD ER LC TR MO FDI ICT Mean 0. however.50** 1. the explanation might be not so straightforward. independently drawn statements on the effect of ICT infrastructure and FDI inflows on exporting.34 0.29** 3 4 5 6 Table III.00 2 0.32** 2 0.11 2.58 1.46 1. That is.22** 2 0. The hierarchical regression in Table IV confirms the relevance of censored samples again (from full model 2 to full model 5).24** 0.IMR 20.5 564 here. the increase in ICT infrastructure investment was not significantly associated with an increase in exporting (refer to full model 2 in Table IV).00 0.23** 2 0.47** 2 0.

82) 1.11*** (4.01 (0.14* 2.43 0.34) 1.04 (2 0.91 – 2.14) 1.19) 5.82) 0.18) 1.37 (1.43) 1.59*** (10.92) 20.29 (0.95 (1.18) 1.54) 0.31* (2.02* 1.13) 0.90 (0.40 – 1.05) ASEAN dummy 0.12*** 1.31*** (5.36) 1.34** (2.06* 2.09) 0.50 0.06) 3.77) 2.10 (1.30*** (5.72 0.16 (0.90*** 1.02 (2 1.93) 1. t-statistics are in parentheses.13** (2 3.46* (2.17) 0.89) 0.36 (1.17 (1.99) 2.03) 2.53*** (3.61 0.70 26.98*** (7.83*** (3.92 Note: Dependent variable: Log EXP.001 Exporting in ASEAN/AFTA countries 565 Table IV.90) 0.28) 0.86 25.64 0.65) 0.57*** (6.74) 0.34) 0.91) 1.53) 29.54 0.34) 20.01.73* (2 2.67) 1.58** (2.22) 0.30*** (5.ASEAN/AFTA Model (n ¼ 66) Full model 1 (n ¼ 156) Full model 2 (n ¼ 156) Full model 3 (n ¼ 156) Full model 4 (n ¼ 156) Full model 5 (n ¼ 156) CEFTA model (n ¼ 48) LAIA model (n ¼ 42) Log FDI Log ICT Log PD Log ER Log LC Log TR Log MO 0.60 1.16) 0.49* (2 2.48* (2.46) CEFTA dummy LAIA dummy Constant 210.79) 1.96) 1.05.06 (0.18) 1.91 – 1.05 (2 1.65 – 1. * indicates significance at 0.01 (0.01 1.28) 0.52 0.25) 0.30** (2.62 (2 0.49) 0.18*** (4.45) 20.12 (1.87 21.49 0.71*** (5.25) 0.47) 0.20*** (4.68* (2. Regression estimates .92 23.95) 0.93 0.14* (2.59) 4.31) 1.67) 0.13) 0.82) 0.18) 1.34 (0.75*** (5.13) 0.19*** (2 6.22*** (5.10*** (2 8.73 (2 1.24*** (4.92 0.58) 7.06) 0.76*** (8.62) 1.31 R2 Adjusted R 2 R 2 change Durbin-Watson 242.48) 0.01) 17.47) 0.39* (2.31*** (6.89 (2 0.29) 20.18) 1.00) 0. *** indicates significance at 0.64*** (4.54) 2.84) 0.51 (0.48** (3.40** (3.77*** (7.24*** (4.33) 0.87 22.32*** (5.26 (1.27*** (12.28) 0.66) 0.01 (0.51 0. ** indicates significance at 0.53 0.18) 0.19 (2 0.47 (0.77*** (3.

In addition. A study of exporting tendencies reveals that ASEAN/AFTA trade bloc can be differentiated from the two other blocs (CEFTA and LAIA) in that the ASEAN/AFTA countries are more prone to be used as markets themselves as opposed to merely production facilities for other markets (Lexis-Nexis Academic Universe. ICT infrastructure is a powerful driver of these domestically-driven investments. much more of the exporting activity is being accounted for by domestically initiated investments rather than foreign investment. we conducted a test through two-stage least-squares regression. it is seen that ASEAN/AFTA countries are heavily export-oriented in their own right – on a global scale. 2000). Just as importantly. That is. 0.5 566 the impact of the increase of FDI inflows is significant only in the CEFTA and LAIA samples. the impact of export-oriented FDI on overall exporting in ASEAN/AFTA is not that much as the impact of the same on the other two blocs. Thus. To clarify the question of causality between FDI and exporting in our sample. is primarily market based. FDI was still a strong predictor ( p . much more so than CEFTA or LAIA nations. the FDI flowing into the countries of CEFTA and LAIA is primarily export oriented – or put another way. our test shows that FDI’s impact on . with high level of exports in hardware component parts and consumer goods. 2001). foreign firms are utilizing these host countries’ comparative advantages in order to produce and manufacture goods for other country markets. Put another way. in ASEAN/AFTA.001) of export after permitting the two error terms being correlated. The data also bears witness to this thesis. It then logically follows that an increase in FDI here may not significantly affect exporting activity. in that goods are produced there for host-country consumption. Thus. the countries of ASEAN/AFTA have long been major international exporters (far longer than their CEFTA and LAIA counterparts). and this is why we find great significance in our results relating ICT and exporting in the ASEAN/AFTA sample. since the “fruits” of this FDI are being dissipated in the domestic market. Further investigation into the theoretical foundation of this hypothesis yields an interesting insight. FDI. but would do so in the CEFTA and LAIA markets.e. Thus. in fact. by contrast. we can conclude that while the causality between FDI and export is possible both ways. The above discussion gives rise to the view that an increase in FDI inflows from countries outside the bloc will not significantly affect the level of exporting in ASEAN/AFTA.IMR 20. an increase in FDI would significantly and directly impact exporting – since that is the purposeful utilization of the FDI in the first place. The FDI flowing into ASEAN/AFTA. the largest five ASEAN countries) during the 1987-1997 period (Fan and Dickie. accounted for 4 percent to over 20 percent of the gross domestic product growth in the ASEAN-5 (i.

the increase in GDP and its consequential effect on the level of increase in exporting is a matter worthy of investigation. and consequentially to higher exports. 2000). public or government policy variables could be Exporting in ASEAN/AFTA countries 567 . the main targets of mobile exporters were CEFTA and LAIA nations as opposed to ASEAN ones. In more recent years. the reasons for this are similar to conditions which usually characterize FDI: “advantages in the hands of foreign firms and reasons for internalizing the transactions”. Taking Indonesia as an example. Thus. it is naturally assumed that the larger the size of the emerging market. with financial liberalization and central bank autonomy. when applying the results of this study. As Wells indicates. intra-ASEAN/AFTA FDI accounted for 15 percent of the cumulative net FDI flows in ASEAN/AFTA from 1995 through to the first half of 1999 (Heinrich and Konan. as indicated in the literature review.exporting is stronger than the other way around. Nevertheless. gross domestic product (GDP). And. and is a direct consequence of the rapid opening up of Eastern European markets in the early nineties. The following variables should be included in a model that has a categorically different sample (perhaps. There has been considerable activity within the ASEAN/AFTA group. because financial liberalization – by increasing savings – can lead to higher investment and growth. However. it is critical to our investigation. Davison (1980) concluded that investment activity is closely correlated with market size. we must be cognizant of a number of variables which (if left uncontrolled) may confound or mediate the results. of exporters from one country establishing outward-oriented factories in other countries. this variable needs to be controlled for so as to not obscure the results. First. together with the burgeoning interest in utilizing cheap labor markets in Latin American countries by US conglomerates during the same time period. Second. borrowing and lending at substantial real rates of interest are made possible by a stable price level (Levine and Scott. The data on these intra-ASEAN/AFTA investments points to increasing regional economic integration. using only individual nations without being classified by trade-bloc) from this study’s. one of the most frequent measures of the size of markets. as in the period under study. this has been indicated and supported by existing theory. close to half of recent investments from other ASEAN/AFTA and East Asian countries has been for export factories – with the target markets being primarily North America or Europe (Wells. In the meantime. may also confound or mediate results. particularly to the experiences of individual nations. 1993). in fact. This is borne out by our results. 1993). Ending state controls allows funds to be channeled into productive investments without being wasted on unprofitable nationalized industries or lending to government cronies (Siddiqi. It is never easy and full of potential pitfalls. Another phenomenon peculiar to ASEAN/AFTA markets also needs elaboration – that of “mobile exporters”. 2001). the larger the level of exports it will have – especially since it makes up part of the very definition of GDP. Third.

research concerned with the determinants of national exporting level should be conducted independently.5 568 critical for some country samples. one may concern multicollearity between a few variables (e.g. The results highlighted within the paper are limited to the period from 1995 to 2000. the limitations (in terms of generalizability) of this study stem primarily from two conditions – time period and regional trade affiliation. Hence. the implication of our results are immediately useful to both MNCs’ considering strategic decisions within these trade blocs.IMR 20. Additionally. While this is because this study aims to reveal the inter-trade bloc differences in the hypothesized relationships. In fact. and also country-level policy makers. Thus. The “shadow economy” or “black market” of the nation needs to be reigned in. while the study provides great generalizability in assessing the peculiar economic experiences within countries belonging to the three regional blocs under investigation. through a comparison with two other major regional blocs – CEFTA and LAIA. either by assimilation into the real economy or through strict law enforcement to mitigate its counter-productive effects on real market development. thus. reflecting the results from this study. which means the difference between nation members in a trade bloc. Black markets in some emerging economies are so large that both these measures would need to be implemented simultaneously to have any significant effect. along with regional and national characteristics. enterprise law. The drivers of exporting between trade blocs are recognized to be different in many ways. This paper has contributed to the understanding of the effect of FDI inflows and ICT infrastructure on Exporting in ASEAN countries. the legal and regulatory environment should be such that contract law. it should not be interpolated to other regional economic alliances – as each nation (and. ER and FDI: -0. Although a few correlations are highly significant.47). Conclusions Overall. Also. and the relationships can and should be explored further. was given less importance.1999). First. the total estimate for the world’s shadow economy has been upwards of $9 trillion (The Economist. each bloc for which it is a component) presents a unique situation which must be analyzed in the light of its own historic data set. and property rights (including intellectual property) are all conducive to the development and promotion of private enterprise. These variables have two aspects. in recent years. Also. several other constructs should be monitored to . it does not seem to be a major problem because the face validity is so apparent and the multicollinearity measures such as VIF and tolerance value are quite acceptable (please refer to the methods section). and exhibit similar within-group characteristics. using a larger time-frame in the future. Certainly. another limitation of this study is that within-group variability. managers must be cognizant that macro-economic results may not apply to micro-economic conditions – and they must consider their own specific conditions and objectives.

Communications of the ACM. Buckley. pp. pp. Growth and Change. Burr Ridge. 4. 548-62. 6 No.H. “The productivity paradox of information technology”. S. (2000). W. Strategic Management Journal. 10th ed. P. C. (1993). FDI inflows. “Information technology and productivity: evidence from country-level data”. Managing Across Borders: The Transnational Solution. pp. 3. Vol. pp. “The impact of market liberalization on firms’ exchange rate exposure”. Harvard Business Press. 1. and Nwanna.R. 3. P. and Moffett. Winter.. The causal relationships between ICT infrastructure. Addison Wesley Longman. and MacPherson. pp. competition and conscience”.. Richard D. GDP Grows. International Business Update 2000. and Ghoshal. Bagchi-Sen. Chaoshin. Vol. A. “New strategies in emerging markets”. Forsans. (1998).. (1980). Clegg. 2. (2000). Bartlett. pp. Unemployment Falls in CEFTA Countries. Czech News Agency (1997). “Competitive characteristics of small and medium-sized manufacturing firms in the US and Canada”. and Graham. S.. (2001). S. “Private infrastructure investment at the subnational level: challenges in emerging economies”. 3. IL. Exporting in ASEAN/AFTA countries 569 . Brynjolfsson. 2. 17 No. (1993). Vol. International Marketing. Bartels. and Douglas. 40-52. Vol. 11 No. Some candidate constructs in this regard have been discussed at the end of our discussion section. The export-oriented foreign investments from MNCs are expected to play a mediating role between ICT infrastructure and national level of exporting. Fort Worth. T. The Columbia Journal of World Business. Czinkota.I. (2001). (1999). national and resource-based strategies: an examination of strategic choice and performance in the vehicle components industry”. (1989). Davison. ASEAN Economic Bulletin.formulate and give tangible implications for each individual country. B. 7-18. International Trade Forum. C. and Quelch. 67-77. p. 30 No. Hung. and Vives.. 7-20. A. J. References Abel. Cavusgil. I. Boston. N. D. TX. 36 No. 12. 4th ed. F. “Responding to the challenges of global markets: change. S. Journal of Project Finance. Vol. 7. K. 4. (2000). pp. 55-66. Sloan Management Review. “Global. 1. Management International Review. Boston. M. No. pp. Vol. The Dryden Press. pp. J. 9-23. Macroeconomics. (1993).A. 11 No. Vol. complexity. 551-67. 40 No. Vol. M. Ronkainen. K.. “The location of foreign direct investment activity: country characteristics and experience effects”. 41 No. G. Beato. MA. Irwin. J. Management Science. pp. and Reilly. and exporting should be extensively investigated though more empirical tests and further theoretical discussion. Competitiveness Review. A. Vol. P. and Bernanke. August 6. (2000). Dewan. and Freeman. Journal of International Business Studies. 324-41. E. (2001). 251-74. (2000). Vol. Cateora. S. pp. 315-36. “Preparing for export marketing”. 14 No. “Increasing the size of the country: regional economic integration and foreign direct investment in a globalized world economy”. “Multinational firms and FDI in Southeast Asia: post crisis changes in the manufacturing sector”. 2. and Kraemer. 46 No. (1996). N. C. MA. Carr. K. Arnold. Craig.

The International Operations of National Firms: A Study of Direct Foreign Investment. Kaleidoscope. World Development. 364-76. and Konan. Vol. Journal of World Trade. pp. New Political Economy. 70. (1999). Lee. and Biswas. Vol. evaluation. 151-67. pp. NJ. 29-55. and World Reference Atlas. and Wells. pp. The Columbia Journal of World Business. C. Vol. First Quarter. 12 Fall. Kumar. “Old debts and new beginnings: a policy choice in transitional socialist economies”. Vol. (1996). pp. and Lang. Garten. 3 No. Vol. 13 No. 3. “Trade and wage inequality: are they related?”. (1992). The World Factbook. X. 23 No. Lages. Drabek. Vol. “The big emerging markets”. J. Atlantic Economic Journal. 241-69. pp. 21 No. 2. and development”. (2000). pp. Levine. (1984).V. B. K. 3. N. pp. Leonidou. “Prospects for FDI in AFTA”. Katsikeas. Y. Prentice Hall. J. 493-511. (The) Economist (1999). pp. C. pp. S. the Hutchinson Dictionary of World History. 4 No. J.IMR 20. 28 No. 9-23. “The new liberalism: trade policy developments in emerging markets”. (1996). 319-30. 141-56. “Finance and economics: black hole”. Vol. B. Doukas. 19-40. B. 1. P. Vol. R. Political Handbook of the World. (2000). (1982). 3. Vol.. “Determinants of LDC exporters’ performance: a cross-national study”. sourced from: Europa World Year Book. L. Financial Market Trends (1998). (2002). MA.5 570 Dominguez. P. J. pp. Macroeconomics: Theories and Policies. pp. ASEAN Economic Bulletin. 3. Vol. 7-31. Fagre. Lexis-Nexis Academic Universe (2001). 18 No. August 28. 32 No. (1998). (1976). p. “Foreign direct investment and economic development: lessons from six emerging economies”. 2. “A conceptual framework of the determinants of export performance: reorganizing key variables and shifting contingencies in export marketing”. Kogut. L. 3. and Stottinger. 30 No. 17 No. H. Vol. 141-60. staff report. Heinrich. Journal of International Marketing. N. D. D. (1993). “Normative observations on the international value-added chain and strategic groups”.G. pp. N. US Department of State. Holzmuller. Journal of the Academy of Marketing Science. Hall. L. J.. 312-23. and Dickie. 28-52. 28 No. 5. 7th ed. Journal of International Business Studies. 2. 59. 337-65. Dunning. L. (1998). Fall. Journal of International Business Studies. Journal of Global Marketing. World Population Prospects. Journal of Banking & Finance. 1-20. Saunders. Growth and Change. (2000). Hymer. Ghosh. pp.-S. “An overview of relations with national governments”. OECD. “Labor shock and the diversity of transnational corporate strategy in export processing zones”. S. 280-4. (2001). (1994). Journal of International Business Studies. Cambridge. “Bargaining power of multinationals and host governments”.. “Determinants of export orientation of foreign production by US multinationals: an inter-country analysis”. and Laird. MIT Press. “The contribution of foreign direct investment to growth and stability: a post-crisis ASEAN-5 review”. (1999). Vol. Summer. . P. Journal of International Business Studies. first quarter. pp. and Sequeira. pp. “Firm-level export performance assessment: review. pp. ASEAN Economic Bulletin. “The pricing of currency risk in Japan”. Upper Saddle River. R. and Morgan. Fan. L. and Scott. 4. (2000). No.. Froyen. “Structural modeling of success factors in exporting: cross-validation and further development of an export performance model”.

2. pp. “Services under siege: the restructuring imperative”. Vol. (1991). R. 3. 31 No. Rockinger. 71 No. (1993). Vol. Johns Hopkins University Press. “Does economic integration cause foreign direct investment?”. Saunders. “Economic and political determinants of foreign direct investment”. Woodward. C. 173-96. (2000). 161-75. pp. Competitive Advantage of Nations. M. FDI. Summer. pp. Vol. Baltimore. Vol. “Exporting the gospel of productivity: United States technical assistance and British industry 1945-1960”. Siebert. S. pp. Vol. 7 No. 456-72. and Frey. 33. K. “Trade shows. and Carpano. N. and Tomlinson. (Ed. Further reading Calliano. (1999). Exporting in ASEAN/AFTA countries 571 . 37 No. Vol. S. pp. G. Wells Jr. and Urga. Wilson. 16-25. M. Porter. P. Multinational Business Review. in Froot. Multinational Business Review. “Gathering export market information using the internet”. 34 No. IL. R. Journal of International Business Studies. W. J. Routledge. Vernon. trade missions and state governments: increasing FDI and high-tech exports”. and economic growth: the case of Ireland”. New York. Yarbrough. (1996). (1999). 2. International Journal of Commerce & Management. (1990). first quarter. Foreign Direct Investment. September/October. 13 No. Columbia Journal of World Business. 208-29. Siddiqi. R. (1995). 4. G. Vol. Motta. (1999). 4.. London. (1997). pp. S. 12 No. B. (1993). Vol.).Monye. Fall. and Yarbrough. pp. M. Journal of International Business Studies.A. International Marketing Review. Telecommunications and Economic Development. Vol. NY. 725-34. The World Economy: Trade and Finance. Tiratsoo. B. 16 No. DC. 121-44. 68. 2. Roach. Schneider. Harvard Business Review. 68-73. (2000). pp. 28 No. pp. “The export competitiveness of ASEAN economies 1986-1995”. Vol. Vol. “National systems of technological innovation. 41-81. “Mobile exporters: new foreign investors in East Asia”. the University of Chicago Press. “Research note: international marketing management: a separate academic discipline? An empirical assessment of the need for specialist education and training”. International Economic Review. 2. Journal of Comparative Economics. D. pp. World Bank (1993). pp. 91-104. 1. Chicago. ASEAN Economic Bulletin. (1996). N. L. H. T. (2000). 5-14. N. The Free Press. 10 No. F. 57-76. Chicago. pp. 1. 3. (1985). “Gender wages inequality and export-led growth in South Korea”. 2nd ed. (1966). “The location of export-oriented foreign direct investment in the Caribbean basin”. and Rolfe. R. “The evolution of stock markets in transition economies”. and Brouthers. IL. Journal of International Economics. Wilkinson. (2000). The East Asian Miracle: Economic Growth and Public Policy. 102-32. Vol. The Journal of Development Studies. S. pp. (1994). The World Economy. Tateisi. and Norman. pp. The Dryden Press. Williamson. Business History Review. (1988). World Development. 757-83. pp. (1997). Oxford University Press for the World Bank. MD. Seguino. 82-91. “How to invest in China: Omron’s experience in the Chinese economic area”. 73-80. “Customizing core competencies: the regional challenge”. “International investment location decisions: the case of US firms”. and Mei. Washington. R. pp.

and the Norwegian Ministry of Trade and Industry. the Norwegian Trade Council. he is hair of the Department of Industrial Economics and Technology Management. 2002 Øystein Moen has a Ph. 2. Currently. the use of information technology in international marketing. and the development of public instruments to stimulate exporting/internationalization. 19 No. Norway is the recipient of the journal’s Outstanding Paper Award for Excellence for his paper ‘‘The Born Globals: a new generation of small European exporters’’ which appeared in International Marketing Review. As Through his responsibly for a number of evaluations of export promotion programs. His research is sponsored by and performed in close co-operation with the Research Council of Norway. Vol. . from Nth (now NTNU). His research focuses on the internationalization processes of newly established high-tech firms. he has had a significant impact on the development of public export promotion programs in Norway.Literati Club Awards for Excellence Øystein Moen Norwegian University of Science and Technology (NTNU) Trondheim.D.

Sign up to vote on this title
UsefulNot useful