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Title: Study on factors affecting SMEs' export channel choice : entrepreneurial orientation (EO), networks, network diversity, networking capability and institutional distance
Author: Deng, Jing
Awarding Body: King's College London
Current Institution: King's College London (University of London)
Date of Award: 2017
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This dissertation integrates transaction cost analysis (TCA), resource-based view (RBV), network and institutional theories to explore the effect of entrepreneurial orientation (EO), networks (i.e., network size and strength), network diversity, networking capability and institutional distance on small and medium sized enterprises (SMEs) export channel choice. Previous literature on the topic of export channel choice has generally focused on transaction cost theory. Under the TCA logic, observed channel structures are always thought to be those that minimize the costs associated with opportunism, whilst economizing on bounded rationality. Although TCA does a good job of explaining export channel choice, studies have ignored some indirect potential effects, such as the external macro-level institutional context, or the resources and capabilities a firm possesses. In order to fill these knowledge gaps, this research drew on the perspectives of network, institutional, TCA and RBV of the firm, suggesting that an internationalizing firm’s EO, networks (i.e., network size and strength), networking capability, network diversity and institutional distance impact its export channel choice via the mechanism of affecting transaction costs and value creation. In this dissertation, I utilized a survey research design to collect data from Chinese manufacturing SMEs involved in exporting. Based on the valuable data collected from 203 firms, the empirical findings from this study found that firms possessing high EO and network diversity make very different export structure choices from those that have weak EO capability and network diversity. As expected, network diversity is found to be positively related to the choice of hierarchical export channels. In contrast to our prediction that high-EO firms are more likely to choose a hierarchical export channel, a firm with a high-level EO is found to be more likely to choose an intermediate export channel than the hierarchical mode or market-based mode. This is perhaps due to the fact that firms consider the trade-off between the control that each export channel affords the entrant and the cost of resource commitments. With regard to the moderators, contrary to our initial expectations, I found no evidence that a firm’s networks (i.e., network size and strength) moderate the relationship between EO and export channel choice. It is confirmed that a firm’s networking capability (i.e., knowledge recognizing ability, knowledge assimilation, partnering ability and total networking capability) positively moderates the relationship between network diversity and export channel choice, as indicated by previous studies. An SME’s strong networking capability directly contributes to their resource acquisition and allocation, and consequently improves the efficiency and effectiveness of limited network resources, in turn making it easier for SMEs to export independently. Finally, while institutional distance has been studied in previous literature and He et al ’s (2013) results suggest that the differences in institutional settings are able to affect a firm’s value generating from resource-based advantages and export channel choice, institutional distance (CAGE) does not have an effect in explaining the choice of a specific export channel in our case. I speculate that this finding may be a consequence of the inaccurate measurement or lie in the nature of the study’s sample. Overall, some of the hypotheses are supported and some are not.
Supervisor: Brouthers, Keith David ; Wang, Chia-Ching ; Pruthi, Sarika Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available