Empirical approach to the sequential relationships between firm strategy, export activity, and performance in U.S. manufacturing firms

Abstract

This paper empirically examines the sequential relationships between the firm's strategic factors, export actvity, and performance in US manufacturing firms. The main question addressed in this paper relates to how the firm's key strategic factors such as diversification in product and market, firm size, R&D intensity, and capital intensity influence export activity, and further how the export activity is finally linked to the firm's economic performance with respect to diverse dimensions of performance. The results in a sequential model show that (1) product diversification, R&D intensity, and firm size significantly affect the firm's export activity, (2) export intensity, stemming from the company's key strategic components of business activity, was positively and uniformly related to all aspects of the firm's economic performance, and (3) export activity moderates the relationships between organization's strategic factors and firm performance. Although market diversification does not directly affect exporting, it does, however, sequentially influence firm performance with respect to market-based performance. This study contributes to a new strategic implication of export activity and performance linkage in business and economic research. © 2003 Elsevier Ltd. All rights reserved.