Overcoming export manufacturers’ dilemma in international expansion

By Fang Wu, Rudolf R. Sinkovics, S. Tamer Cavusgil, A. Roath. 2007

231 citations recorded by the source corpus.

Learning and acquiring local market knowledge from foreign distributors are central to manufacturers’ export market performance. Drawing from the resource-based view, we propose that manufacturers need to develop stronger local market competence while simultaneously minimizing the costs of distributor opportunism in order to compete successfully in the export market. Cultural distance and other barriers, however, may hinder the development of local market competence for the manufacturer while contributing to the occurrence of distributor opportunism. In order to overcome these barriers, we examine the impact of three alternative forms of manufacturer governance – trust, knowledge sharing, and contract-based relationship – in export channels. Findings suggest that all three governance mechanisms contribute to enhancing the manufacturer's competence to exploit local market opportunity. However, of the three, trust seems to be the only effective way to curtail distributor opportunism.

Subfields: Management Information Systems, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/b7db288b3bf2a047f8013caba289ca915a818ceb

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In Management Information Systems

In Strategy and Management

Citations in the corpus

Knowledge structure in international marketing: a multi-method bibliometric analysis (2012, background): “To properly evaluate IM strategy and international channel relations (Skarmeas et al. 2002; Wu et al. 2007), future studies should relate performance back to IM strategy.”
The effects of supplier involvement and knowledge protection on product innovation in customer-supplier relationships: a study of global automotive suppliers in China (2014, background): “In a study of exporters dealing with foreign distributors, Wu et al. (2007) found that trust plays the most important role in governing international channel relationships and developing local market competence.”
Resource-Based and Institutional Perspectives on Export Channel Selection and Export Performance (2013, background): “have a different understanding of the market information or different goals and objectives (Klein et al., 1990; Wu et al., 2007).”
Export propensity and intensity of subsidiaries in emerging economies (2008, background): “In distant markets, exporters may face greater problems in obtaining knowledge about local market opportunities, in coordinating sales strategies and in monitoring agents (Ellis, 2007; Wu et al., 2007 ).”