2007 Oxford Business & Economics Conference
ISBN : 978-0-9742114-7-3
AN ANALYSIS OF THE INTERNAL CAPACITIES OF
REGIONAL EXPORTERS IN NSW, AUSTRALIA.
Abstract submitted to
Oxford Business & Economics Conference
June 24-26, 2007
Oxford University, UK
Assoc. Prof. Ann Hodgkinson
School of Economics and Information Systems
Faculty of Commerce
University of Wollongong
Northfields Avenue
Wollongong, 2522
New South Wales
Australia
Contacts
Tel: 61 2 4221 4026
Fax: 61 2 4221 3725
Email: annh@uow.edu.au
June 24-26, 2007
Oxford University, UK
1
2007 Oxford Business & Economics Conference
ISBN : 978-0-9742114-7-3
AN ANALYSIS OF THE INTERNAL CAPACITIES OF REGIONAL
EXPORTERS IN NSW, AUSTRALIA.
Abstract
An analysis of networking activities among SME exporters in regional NSW,
Australia indicated that they tended to be isolated entrepreneurs, who relied primarily
on their internal innovation and marketing capacities rather than on local networks
and clusters as suggested by regional development theory (Vaessen and Keeble 1995).
Many of these firms were small, new ‘born global’ firms that had entered world
markets with an innovative niche product and helped by the very low Australian
exchange rates prevailing at that time (Hodgkinson 2003).
In this paper, the internal entrepreneurial capacities of these exporters are analysed
from the perspective of the resource-based view (RBV) literature. This approach
proposes that performance is the result of internal attributes (resources and
capabilities) of the firm. To be a successful exporter, the small firm must acquire
sufficient resources to cover the higher risks of operating in international markets.
Exporters are divided into five categories based on their growth performance between
1996/97 and 2000/01: negative, zero, modest, good and fast. Each group is analysed
to determine the relationship between their export growth performance and a series of
internal resource and capability variables. These variable are (a) formation of
strategic partnerships (Dhanaraj and Beamish 2003); (b) sources of information; (c)
types of technological change; (d) export strategy; (e) organisational corporate and
production strategies (Priem and Butler 2001); (f) investment in physical capital; (g)
employment growth (Barney 1991). The analysis is performed using the Probit
logistical model.
Results indicate that those exporters with the fastest growth focused on new product
development rather than production innovations in their R&D strategies and sourced
new technology from others through adapting market innovations and partnerships
with other firms rather than relying on self development of innovations. Exporters
with good or fast growth sourced information by individual travel to visit clients,
agents, etc., from trade and business magazines, and from equipment and business
suppliers external to their local region, while those with poorer export growth had
negative results for these sources of information.
It is also argued in the RBV that sustained performance depends on a firm’s capacity
to anticipate changes in the economic structure of their markets (Barney 1991).
Exporters with good or fast growth only perceived barriers to future growth in terms
of remaining technologically and cost competitive with their rivals rather than from
internal capacity problems.
The results from this study thus indicate that NSW regional exporters are isolated
entrepreneurs who rely heavily on their internal capacity and resources to achieve
high export growth, consistent with the RBV. Their capacity for sustained growth
over time will depend on their ability to harness these resources and capabilities to
adjust to changing market competitive conditions as the competitive advantage of
their initial innovation wains and exchange rates rise.
June 24-26, 2007
Oxford University, UK
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2007 Oxford Business & Economics Conference
ISBN : 978-0-9742114-7-3
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