Financial assistance, marketing assistance and export commitment to improve export performance

Abstract

The purpose of this paper is to investigate the contingent relationship between government marketing assistance for export and the performance of early internationalizing firms in a developing country’s low-tech industry. The authors employ hierarchical multiple regression based on the data obtained from Indonesia, a developing country and a leading exporter of apparel products worldwide. The authors used a sample of 100 early internationalizing apparel firms to test the hypotheses. Research describes the relationship between export assistance (financial and marketing assistance) and performance as direct. Recently, some researchers have suggested moderators between them. The authors argue that the relationship between the two is contingent on the level of competitive advantage. The authors find that financial assistance and marketing assistance are directly related to export performance. The relationship between financial assistance and export commitment to export performance are significantly. The effect of marketing assistance is positively, but only marginally, moderated by competitive advantage. Contrary to researchers overarching focus on a direct relationship, the authors investigate the moderation on the relationship between financial assistance and marketing assistance, and early internationalizing firm’s performance in a developing country’s low-tech industry setting. The authors use competitive advantage as the moderator; it is one of the most important internal determinants of export performance and extremely relevant in early internationalizing firms. The differential impact of financial and marketing assistance provides additional insights.