Evaluating the dynamics of export performance: moderating effects of proximate environment on firm strategies and export performance

Abstract

Generic strategies are composed of three main firm strategies: “cost leadership”, “differentiation” and “focus” strategies. Any firm who desires a prominent performance in the national or international business environment should follow one of these strategies and adapt itself to the demands of the relevant strategy. Competitive Advantage of Nations Framework (Diamond Framework), on the other hand, asks the question “why some nations prosper in some industries whereas others cannot” and is used to measure the competitiveness level of countries in certain industries. According to this framework, nations with favorable “factor” and “demand conditions”, a proper “context for firm strategy and rivalry”, together with complementary “related and supporting industries” are said to prosper better than the ones who lack these determinants. In this thesis, Competitive Advantage of Nations Framework is treated as a proximate environment for firms that are competing internationally and a moderating effect of this framework on the relationship between generic firm strategies and firms` export performances is proposed and tested. The empirical component of the thesis includes a survey of 154 exporting firms. Overall, results provide some, though limited support for the proposed relationships.