Export processing zones and growth triangle development: The case of the BIMP-EAGA, Southeast Asia

Exorts processing zones (EPZs) and growth triangles have been two common Asian initiatives to increase wealth and regional competitiveness in the world economy. Since they are seldom analysed jointly, this paper investigates their mutuality in the development process. Taking the problematic case of the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) triangle, we explore the role of EPZs in enhancing regional collaboration, competitiveness, and domestic linkages. Despite the triangle's weak economic complementarities, its processing zones are found capable of advancing development by furthering opportunities in regionalisation/localisation of production. Latterly, trade and investment liberalisation within ASEAN raises broad questions about the rationale of EPZs and growth triangles. Zone-triangle nexuses will require rethinking as, under different regulatory conditions, the zones compete more directly across ASEAN and also with global rivals. Copyright © 2005 John Wiley & Sons, Ltd.

The effects of foreign acquisition on domestic and export markets dynamics in China

Using recent data from the Chinese manufacturing industry and the generalised propensity score, this paper establishes economically significant causal effects of foreign acquisition on domestic and export markets dynamics.

Finance and firm export in China

Using a rich panel data set, we provide a rigorous analysis of the relationship between access to external finance, foreign direct investment and the exports of private enterprises in China. We conclude that, in order to foster the exports of indigenous enterprises, the elimination of financial discrimination against private firms is likely to be a more effective policy tool than the reliance on spillovers from multinational firms. © 2007 Blackwell Publishing Ltd.

Institutional antecedents and performance consequences of influence strategies in export channels to transitional economies

This study examines how the institutional environment of transitional economies impacts institutional arrangements in the form of influence strategies employed by Western exporters in managing relationships with local firms. Reflecting environmental components, a Western firm’s understanding of Eastern Europe’s regulatory volatility, foreignness, and partner’s control locus is posited to impact economic performance by affecting key coercive and non-coercive influence strategies. A model specifying the effects of the institutional environment on economic outcomes is developed and tested on data from US exporters to Eastern Europe. A structural equation analysis indicates institutional components have a differential impact on the influence strategies employed by these Western firms and on export performance. In particular, use of coercive legalistic pleas is increased by regulatory volatility but reduced by perceived foreignness while use of non-coercive recommendations is increased by the partner’s external locus of control but not by perceived foreignness. Importantly, the institutional environment’s impact on economic performance is shown to be direct as well as indirect through the influence strategies Western firms employ in Eastern Europe. The study concludes with a discussion of implications for managers and researchers.

Innovation and export performance:evidence from UK and German manufacturing plants

Using comparable plant-level surveys we demonstrate significant differences between the determinants of export performance among the UK and German manufacturing plants. Product innovation, however measured, has a strong effect on the probability and propensity to export in both countries. Being innovative is positively related to export probability in both countries. In the UK the scale of plants’ innovation activity is also related positively to export propensity. In Germany, however, where levels of innovation intensity are higher but the proportion of sales attributable to new products is lower, there is some evidence of a negative relationship between the scale of innovation activity and export performance. Significant differences are identified between innovative and non-innovative plants, especially in their absorption of spill-over effects. Innovative UK plants are more effective in their ability to exploit spill-overs from the innovation activities of companies in the same sector. In Germany, by contrast, non-innovators are more likely to absorb regional and supply-chain spill-over effects. Co-location to other innovative firms is generally found to discourage exporting.

The determinants of export performance:evidence for manufacturing plants in Ireland and Northern Ireland

The dramatic GDP and export growth of Ireland over the last decade forms a marked contrast with that of its nearest neighbour Northern Ireland. In Ireland, export volume growth averaged 15.5% p.a. from 1991 to 1999 compared with 6.3% from Northern Ireland. Using data on individual manufacturing plants this paper considers the determinants of export performance in the two areas. Larger, externally owned plants with higher skill levels are found to have the highest export propensities in both areas. Other influences (plant age, R&D, etc.) prove more strongly conditional on location, plant size, and ownership. Structural factors (e.g. ownership, industry) explain almost all of the difference in export propensity between larger plants in Northern Ireland and Ireland but only around one-third of that between smaller plants. Significant differences are also evident between plants in terms of their sources of new technology. For indigenously owned plants, inhouse R&D is important. For externally owned plants, R&D conducted elsewhere in the group - typically outside Ireland and Northern Ireland - proves more significant. This external dependency and lower than expected export propensity on the part of small plants in Northern Ireland represent significant policy challenges for the future.© 2006 Scottish Economic Society. Published by Blackwell Publishing Ltd.

Differences in market-oriented behaviour levels across firms' domestic and export marketing operations:a study of antecedents and consequences

Researchers are beginning to recognise that organisations often have different levels of market orientation across different aspects of their operations. Focusing on firms involved in export marketing, this study examines how market-oriented behaviour differs across firms' domestic and export marketing operations. In this respect, the study is the first of its kind since it investigates three main issues: (1) to what extent do differences exist in firms' levels of market-oriented behaviour in their domestic markets (i.e., their domestic market-oriented behaviour) and in their export markets (i.e., their export market-oriented behaviour), (2) what are the key drivers of such differences, and (3) what are the performance implications for firms of having different levels of domestic and export market-oriented behaviour. To shed light on these research questions, data were collected from 225 British exporting firms using a mail questionnaire. Structural equation modelling techniques were used to develop and purify measures of all construct of interest, and to test the theoretical models developed. The results indicate that many of businesses sampled have very different levels of market orientation in their domestic and exporting operations: typically, firms tend to be more market-oriented in their domestic markets relative to their export markets. Several key factors were identified as drivers of differences in market orientation levels across firms' domestic and export markets. In particular, it was found that differences were more pronounced when: (i) interfunctional interactions between domestic marketing and export marketing are rare, (ii) when domestic and export marketing follow asymmetric business strategies, (iii) when mutual dependence between the functions is low, (iv) when one or other of the functions dominates the firm's sales, and (v) when there are pronounced differences in the degree to which the domestic and the export markets are experiencing environmental turbulence. The consequences of differences in market-oriented behaviour across firms' domestic and export markets were also studied. The results indicate that overall sales performance of firms (as determined by the composite of firms' domestic sales and export sales performance) is positively related to levels of domestic market-oriented behaviour under high levels of environmental turbulence in firms' domestic markets. However, as domestic market turbulence decreases, so to does the strength of this positive relationship. On the other hand, export market-oriented behaviour provides a positive contribution to firms' overall sales success under conditions of relatively low export market turbulence. As the turbulence in export markets increases, this positive relationship becomes weaker. These findings indicate that there are numerous situations in which it is sub-optimal for firms to have identical levels of market-oriented behaviour in their domestic and exporting operations. The theoretical and practical implications of these findings are discussed.

Exchange rate economic exposure and hedging:the significance of currency options

This thesis focuses on the theoretical examination of the exchange rate economic (operating) exposure within the context of the theory of the firm, and proposes some hedging solutions using currency options. The examination of economic exposure is based on such parameters as firms' objectives, industry structure and production cost efficiency. In particular, it examines an hypothetical exporting firm with costs in domestic currency, which faces competition from foreign firms in overseas markets and has a market share expansion objective. Within this framework, the hypothesis is established that economic exposure, portrayed in a diagram connecting export prices and real exchange rates, is asymmetric (i.e. the negative effects depreciation are higher than the positive effects of a currency depreciation). In this case, export business can be seen as a real option, given by exporting firms to overseas customer. Different scenarios about the asymmetry hypothesis can be derived for different assumptions about the determinants of economic exposure. Having established the asymmetry hypothesis, the hedging against this exposure is analysed. The hypothesis is established, that a currency call option should be used in hedging against asymmetric economic exposure. Further, some advanced currency options stategies are discussed, and their use in hedging several scenarios of exposure is indicated, establishing the hypothesis that, the optimal options strategy is a function of the determinants of exposure. Some extensions on the theoretical analysis are examined. These include the hedging of multicurrency exposure using options, and the exposure of a purely domestic firm facing import competition. The empirical work addresses two issues: the empirical validity of the asymmetry hypothesis and the examination of the hedging effectiveness of currency options.