Clemens Lutz

Using networks to solve export‐marketing problems of small‐ and medium‐sized firms from developing countries

The objective of this paper is to review the literature on how networks can be used in developing countries to encounter export‐marketing problems. Several case studies of export‐grouping and subcontracting networks, involving small‐ and medium‐sized enterprises in developed and underdeveloped countries, are reviewed. The paper presents a qualitative model that identifies the determining factors for successful export network organisations: a clearly defined market problem or market opportunity; a willingness to respond together; development of solidarity, coherence and commitment; initiating foreign market activities. This model is useful to study similar initiatives in developing countries.

A classification of export marketing problems of small and medium sized manufacturing firms in developing countries

Purpose – The objective of the study is to derive a classification of export problems of SMEs from developing countries on the basis of a comprehensive literature study.Design/methodology/approach – The study performed a comprehensive and systematic literature review of 40 articles published over a period of 25 years (1980‐2004). The export problems are classified into company barriers, product barriers, industry barriers, export market barriers and macro environment barriers.Findings – The study provides a modified qualitative model that can be used by future researchers to further their research endeavour in export problems of firms from developing countries. It also identifies the similarities and differences of export problems in developed and developing countries.Research limitations/implications – The lack of extensive research on export problems limited the number of articles reviewed in this study. Thus, the results of this paper should be considered as a stepping stone for future research.Practic...

Comparing export marketing channels: developed versus developing countries

The article presents a qualitative model, derived from the transaction cost and resource dependence theory, to compare the business relationships in the marketing channels between footwear buyers in The Netherlands and Uganda, and their suppliers. The observed business relationships are used to design an export‐marketing channel for Eritrean footwear manufacturers looking for new export market opportunities. The findings show that the design of the export marketing channels for Uganda and The Netherlands differs as a result of the transaction costs involved. Taking into account the weak resource base of the Eritrean manufacturers, we conclude that it may be easier for them to enter the Dutch market than the Ugandan market.

Testing for the law of one price and identifying price-leading markets: an application to corn markets in Bénin

A data-determined method is proposed to test for the law of one price as a long-run equilibrium condition and to identify which markets in a network of spatially dispersed commodity markets quote the reference price. The method consists of supplementing Johansens FIML cointegration procedure with a permanent-transitory decomposition and rules of inference in linear time-series models with unit roots. As an example, we apply our method to prices of six corn markets in Benin. We find that the law of one price holds in the long-run. It appears that two rural markets quote the reference price: their prices adjust fastest towards the permanent change induced by the common stochastic trend.

Evaluating the effectiveness of export promotion services: A customer (user) perspective

Purpose – The lack of detailed statistics in many developing countries makes it very difficult to assess the effect of export support services on the firms export performance. Moreover, a fundamental factor that creates confusion is the lack of a straightforward causal relationship between a specific export support activity and changes in actual trade patterns. Despite these difficulties, the purpose of this paper is to show that an assessment of the effectiveness of export promotion and support services can be made on the basis of the perceptions of the manufacturers involved. The method is simple and informative.Design/methodology/approach – This research is based on a survey of 88 footwear and textile manufactures from a small new African country, Eritrea. The sample size accounts for 90 percent of the overall population.Findings – On average, the quality of the export support services is rated as satisfactory. This can be considered as rather low, as the export promotion policy of the government is m...Purpose – The lack of detailed statistics in many developing countries makes it very difficult to assess the effect of export support services on the firms export performance. Moreover, a fundamental factor that creates confusion is the lack of a straightforward causal relationship between a specific export support activity and changes in actual trade patterns. Despite these difficulties, the purpose of this paper is to show that an assessment of the effectiveness of export promotion and support services can be made on the basis of the perceptions of the manufacturers involved. The method is simple and informative. Design/methodology/approach – This research is based on a survey of 88 footwear and textile manufactures from a small new African country, Eritrea. The sample size accounts for 90 percent of the overall population. Findings – On average, the quality of the export support services is rated as satisfactory. This can be considered as rather low, as the export promotion policy of the government is much more ambitious. The results of the discriminant analysis are in line with the literature and show that small enterprises in Eritrea have less access to export support services than larger firms. This can be considered as a major failure of the policy as in the modern entrepreneurial export economy small firms play a crucial role. Research limitations/implications – Although the sample size accounts for 90 percent of the population, it is relatively small. To verify the results it would be interesting to conduct a comprehensive survey that includes all export manufacturing industries in Eritrea. Practical implications – The findings of this study are useful for export policy makers in developing countries. The presented method shows that it is possible to measure the perception of the manufacturers with regard to the effectiveness of export promotion and support services. It also allows to compare the performance of those services and to identify priorities for the policy agenda. Originality/value – The study develops a simple evaluation tool for the effectiveness of export support services in developing countries.

The Impact of Trade Credit on Customer Switching Behaviour: Evidence from the Tanzanian Rice Market

Abstract We use primary survey data to analyse the relationship between trade credit and customer switching in the context of trade transactions between wholesalers and retailers in the Tanzanian rice market. Results reveal a negative relation of trade credit and customer switching, that is, trade credit acts as a switching barrier; retailers are reluctant to move to another supplier if they depend on trade credit as a source of external finance. This interpretation fits with the underdeveloped financial markets in Tanzania, in which access to external finance is poor among rice retailers.

Evaluating the effectiveness of export support services in developing countries

Purpose – The lack of detailed statistics in many developing countries makes it very difficult to assess the effect of export support services on the firms export performance. Moreover, a fundamental factor that creates confusion is the lack of a straightforward causal relationship between a specific export support activity and changes in actual trade patterns. Despite these difficulties, the purpose of this paper is to show that an assessment of the effectiveness of export promotion and support services can be made on the basis of the perceptions of the manufacturers involved. The method is simple and informative.Design/methodology/approach – This research is based on a survey of 88 footwear and textile manufactures from a small new African country, Eritrea. The sample size accounts for 90 percent of the overall population.Findings – On average, the quality of the export support services is rated as satisfactory. This can be considered as rather low, as the export promotion policy of the government is m...Purpose – The lack of detailed statistics in many developing countries makes it very difficult to assess the effect of export support services on the firms export performance. Moreover, a fundamental factor that creates confusion is the lack of a straightforward causal relationship between a specific export support activity and changes in actual trade patterns. Despite these difficulties, the purpose of this paper is to show that an assessment of the effectiveness of export promotion and support services can be made on the basis of the perceptions of the manufacturers involved. The method is simple and informative. Design/methodology/approach – This research is based on a survey of 88 footwear and textile manufactures from a small new African country, Eritrea. The sample size accounts for 90 percent of the overall population. Findings – On average, the quality of the export support services is rated as satisfactory. This can be considered as rather low, as the export promotion policy of the government is much more ambitious. The results of the discriminant analysis are in line with the literature and show that small enterprises in Eritrea have less access to export support services than larger firms. This can be considered as a major failure of the policy as in the modern entrepreneurial export economy small firms play a crucial role. Research limitations/implications – Although the sample size accounts for 90 percent of the population, it is relatively small. To verify the results it would be interesting to conduct a comprehensive survey that includes all export manufacturing industries in Eritrea. Practical implications – The findings of this study are useful for export policy makers in developing countries. The presented method shows that it is possible to measure the perception of the manufacturers with regard to the effectiveness of export promotion and support services. It also allows to compare the performance of those services and to identify priorities for the policy agenda. Originality/value – The study develops a simple evaluation tool for the effectiveness of export support services in developing countries.

Opportunities for Smallholders from Developing Countries in Global Value Chains

Abstract The current policy debate on opportunities for African smallholders in agricultural markets focuses on the need for proper institutions at the market level or governance in the global value chain (GVC). Both discussions neglect insights from strategic management. We argue that successful inclusion of smallholders in GVCs requires the deployment of strategic resources and capabilities in the farming systems. The consequence of this argument is that the ‘inclusion’ of smallholders in GVCs only makes sense if they have the opportunity to create strategic resources.

Perceived barriers to entry: are there any differences between small, medium-sized and large companies?

The objective of this paper is to provide empirical evidence about the importance of barriers to entry. In particular, the perceptions of firms are considered. Three questions are addressed: which entry-barriers are important in the perception of firms in the Dutch economy? Do these perceptions differ between sectors? Do these perceptions differ between small and large firms? It is shown that the procurement of a viable sales volume, access to capital and financial risk, are considered to be the major barriers. The ranking of the importance of specific barriers to entry coheres among the sectors under study. The most remarkable result is that the figures indicate that micro firms perceive lower barriers to entry than medium-sized and large firms.

The determinants of trade credit use : the case of the Tanzanian rice market

Most small businesses in the developing economies suffer from a lack of access to formal external finance. One important alternative source of finance for these entrepreneurs is trade credit. Applying a unique data-set containing data on specific trade relations between rice wholesalers and rice retailers in Tanzania, we analyse the determinants of trade credit demand and supply in this market, using a simultaneous equation modelling approach. The analysis shows that while the demand for trade credit is primarily determined by the extent to which retailers need external funds, supply is mainly driven by wholesalers’ incentives to attract and keep clients. Moreover, wholesalers’ willingness to provide credit increases if they have better information about the possibility that the customer will fail to repay the credit.