THE EXPORT BEHAVIOR OF SMALLER-SIZED

WISCONSIN MANUFACTURING FIRMS

By Bilkey and Tesar, 1977

Key words: export behavior, small-sized firms,

managements, feasibility of exporting
 Authors
Warren Bilkey is Professor of Business at the
University of Wisconsin-Madison. He served for a
period as economics adviser to the President of the
Dominican Republic and has published in the fields of
international business, consumer behavior, etc.
George Tesar is an Assistant Professor of Marketing and
International Management at Georgetown University and
an Associate at the Center for Strategic and International
Studies in Washington, D.C. His research, professional,
and publication interests include internationalization of
firms and organizations.
 Contextualization and structure
The article investigates the export behavior of 423
small- and medium-sized manufacturing firms in
Wisconsin. Data were classified according to stages in
the export development process and analyzed by
multiple regressions.
There are six sections in this paper:
Introduction
Model
Methodology
Summary of findings
Conclusions and implications
Appendix
 Major issues

The analysis explores the meaningfulness of a “stage”

model for examining export behavior. There are six
stages in the export development process.
Stage 1: Management is not interest in exporting
Stage 2: Management makes no effort to explore the
feasibility of exporting
Stage 3: Management explore the feasibility of exporting
Stage 4: The firm exports on an experimental basis
Stage 5: The firm is an experienced exporter
Stage 6: The firm exports to further countries
 Methodology

 Data collection: questionnaires were mailed to 816

Wisconsin firms. 423 fully completed responses
were received (52% of the sample).
 Each stage of the export development process is
regarded as a dependent variable of multiple
regression equation.
 The same dependent variables were tested for each
stage by means of step-wise multiple regression
analysis.
 Findings

At stage 3:
X = 0.02 + 0.465 * L + 0.032 * C
X = whether or not management explored the feasibility of
exporting
L = whether or not management planned for exporting
C = Management’s perception of its firm’s competitive
advantages (score = -2 to +4)
=> Planning for exporting is the most determinant of
exploring the feasibility of exporting. Stage 3 is much more
nearly a function of management’s images of exporting and
foreign lands than of economic consideration!
 Findings

At stage 4:
A = -0.1393+0.0002E+0.102M+0.692U+0.046S
A = whether the firm exports experimentally
E = management’s expectations to what exporting contributes
to its firm
M = management’s quality and dynamism
U = whether the first export order is unsolicited
S = the firm’s size
=> The receipt of an unsolicited initial export order is the
most important determinant of whether the firm enters Stage 4.
The next most important determinant is management’s
quality and dynamism.
 Findings

At stage 5:
D = 0.3151 + 0.004E - 0.48B - 0.041M
D = percentage the firm’s total assets being exported
E = management’s expectations to what exporting contributes
to its firm
B = the number of barriers management perceives to export
M = management’s quality and dynamism
=> The number of perceived barriers is the most important
determinant. The effects of management’s expectation and
quality and dynamism are very slight.
 Findings

The barriers management perceives to exporting are:

Difficulty in understanding foreign business practices

Different product and customer standards

Difficulty in collecting money from foreign clients

Difficulty in obtaining adequate representation

Difficulty in raising necessary fund

 Key contributions

 The export management needs of firms at one

export stage may be very different from the needs
of firms at another stage => the government should
concentrate on a suitable export development
program.
 To increase manufactured exports, the government
should not only make exporting more profitable ,
but also increase managements’ international
interest such as foreign visits, international
business education, etc.
 Key contributions
 Managements interested in exporting should:
 Formulate an export policy
 Formulate an export plan
 Make persons or department specifically responsible for
the firm’s export development
 Search for information about export barriers
 Develop exporting on a step-by-step basis
=> Exporting is not limited to large firms, small firms can
export successfully!