The role of corporate image in business-to-business export ventures: A resource-based approach

Industrial Marketing Management 39 (2010) 752–760

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Industrial Marketing Management

The role of corporate image in business-to-business export ventures: A resource-based approach Stavroula Spyropoulou, Dionysis Skarmeas, Constantine S. Katsikeas ⁎ Leeds University Business School, UK

a r t i c l e

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Article history: Received 30 June 2008 Received in revised form 10 March 2009 Accepted 2 June 2009 Available online 17 March 2010 Keywords: Corporate image advantage Export ventures Resource-based theory

a b s t r a c t Although a growing body of studies suggests that good corporate images have strategic value for the firms that possess them, no research to date has looked at the role of corporate image in export markets. To fill this gap in the extant literature, this study draws on the resource-based view and insights from qualitative interviews to develop a model that links an exporter's financial resources and relationship management capabilities with its corporate image advantage and its performance in the export market. Findings reveal that both financial resources and relationship management capabilities are significant contributors of corporate image advantage, which, in turn, is an important determinant of superior export performance. The study concludes with a discussion of the implications of the findings for marketing theory and practice and suggestions for future research. © 2010 Elsevier Inc. All rights reserved.

1. Introduction Exporting is a common and relatively low-risk way for small and medium-sized firms to gain access to foreign markets, expand their revenues, and safeguard their local market position (Bello & Gilliland, 1997; Peng & York, 2001; Salomon & Jin, 2008). The value of worldwide exporting has now exceeded $8.5 trillion dollars per annum and accounts for over 20% of world GDP (International Monetary Fund, 2006; World Bank, 2006). Further, export trade is expected to continue to grow as a result of increasing globalization, liberalization of national policies, intensifying domestic market competition, and developments in communication, transportation, and information technologies (Albaum & Duerr, 2008; Hill, 2005). International business scholars have embraced this trend, and identifying managerial characteristics, organizational factors, environmental forces, and strategic marketing elements that affect export behavior and success has been the subject of sizeable empirical research over the last three decades (see Aaby & Slater, 1989; Leonidou, Katsikeas, & Samiee, 2002; Madsen, 1989; Zou & Stan, 1998). Within the export marketing literature, an emerging stream of studies adopts the resource-based view (RBV) of the firm to examine the role of competitive advantage in export market operations (Kaleka, 2002; Ling-Yee & Ogunmokun, 2001; Morgan, Kaleka, & Katsikeas, 2004; Morgan, Vorhies, & Schlegelmilch, 2006; Piercy, ⁎ Corresponding author. Leeds University Business School, Maurice Keyworth Building, University of Leeds, Leeds LS2 9JT, UK. Tel.: +44 113 3432624; fax: +44 113 3434885. E-mail address: [email protected] (C.S. Katsikeas). 0019-8501/$ – see front matter © 2010 Elsevier Inc. All rights reserved. doi:10.1016/j.indmarman.2010.02.014

Kaleka, & Katsikeas, 1998; Zou, Fang, & Zhao, 2003). According to the RBV, firms with resources and capabilities that are valuable, rare, and difficult to imitate and substitute can attain a competitive advantage position and enjoy sustained superior performance (Barney, 1991; Grant, 1991; Peteraf, 1993). Drawing from this theoretical perspective has helped enrich the export marketing literature and expand our knowledge base on the role of competitive advantage in explaining behavioral and performance differences across exporting firms. Nonetheless, there is a noticeable lack of studies within the RBV line of reasoning investigating corporate image advantage in export markets. Although theorists suggest that interdisciplinary research and cross-fertilization efforts are particularly desirable for topics that are in the early stage of development such as corporate image (Brown, Dacin, Pratt, & Whetten, 2006), research on this topic and RBV remain disjoined. This oversight is important because organizational image may constitute a type of sustainable competitive advantage by virtue of its potential for value creation—theoretical claims and empirical evidence suggest good corporate image triggers positive costumer product judgements and responses (e.g., Brown & Dacin, 1997; Gurhan-Canli & Batra, 2004; Sen & Bhattacharya, 2001)—and its intangible character which makes replication by competing firms difficult (Aaker, 1996; Ghemawat, 1986; Hall, 1993). Also, this research void is surprising considering that an organization's desired positioning as perceived by its key stakeholder groups is a pivotal strategic decision (Varadarajan, DeFanti, & Busch, 2006) and obtaining a better understanding of corporate image thus constitutes an urgent research priority (Brown & Dacin, 1997; Brown et al., 2006). Further, the process of achieving competitive advantage in foreign markets may be different from that in the domestic market, due to the existence of significant differences in cultural, social, economic,

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political, technological, and allied factors between the two market environments (Kaleka, 2002; Roth & Morrison, 1992). In an effort to fill this gap in the extant literature, this study draws on RBV theory and insights from qualitative interviews to investigate sources of corporate image advantage and its performance implications in export markets. We organize this article as follows: First, we define corporate image. Then, we provide an overview of the RBV and subsequently explain our research model. We suggest that export financial resources promote export relationship management capabilities and that both export venture financial resources and relationship management capabilities are contributors of export venture corporate image advantage, which in turn is related positively to export venture performance (see Fig. 1). Next, we describe the research methods used to test the hypotheses and present the empirical results. Finally, we discuss the implications of the findings for international marketing theory and practice and provide suggestions for further research. 2. Corporate image One of the most important strategic-level problems that corporate managers face concerns the positioning of the organization with respect its various audiences or constituencies (e.g., members and/or employees, shareholders, customers, suppliers, governmental entities, and the business community). Key questions for managers include what stakeholders actually think of the company and what the company wants/believes others think of the company. At the heart of these questions lie the concepts of corporate reputation and image, respectively. Following Brown et al.'s (2006) organizing framework, we distinguish between intended image (i.e., the mental associations about the organization that the organization wants important audiences to hold) and construed image (i.e., the mental associations that organization members believe others outside the organization hold about the organization). Here, we focus on construed corporate image from the perspective of the export manager of the firm. Our field interviews were instrumental in making this choice. They showed that managers automatically think of construed (rather than intended) image. As one export manager stated: “it is not a matter of opinion, image is a perception, but what counts lies in the mind of the receiver.” Given that the focus of this study is on investigating how managers think others see their firm (rather than how managers want others to see their firm), export managers were thus able to provide reliable information on construed corporate image. The importance of this standpoint is associated with theoretical claims and empirical evidence in the organizational behavior and strategic management literatures that suggest organizational decisions and actions are driven essentially by managerial perceptions of reality, rather than by the objective calibration of this reality (e.g., Child, 1972; Day & Nedungadi, 1994). Notwithstanding this, there is scant empirical attention to the study of construed corporate image (Brown et al., 2006).

Fig. 1. Conceptual model.

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Further, we focused on industrial export ventures. An export venture represents the individual export product-market efforts of the firm and, thus, is defined as a single product or product line exported to a specific foreign market (Cavusgil & Zou, 1994; Morgan et al., 2004; Myers, 1999). In business markets it is common for the company's name to also be the brand name across a range of product groups. This is especially the case for the small and medium size firms comprising our sample that export a limited range of industrial products under the company name which serves as an umbrella brand. Our pre-study qualitative interviews indicated that in these situations the image of the export venture coincides with the image of the company. As one export manager put it, “the image of our business is mirrored in the image of the product.” This resonates with Berry's (2000) contention that in some settings the company, rather than the product, becomes the primary brand. Also, theorists suggest that corporate image exists in people's minds and a unanimously shared corporate image for any given organization does not exist because an organization has multiple stakeholder groups (e.g., Barich & Kotler, 1991; Fombrun, 1996; Garbett, 1988; Gregory, 1991). Our fieldwork interviews clearly indicated that export managers attend primarily to their perceptions of how foreign customers view the organization when they assess its construed image in export markets. As one export manager noted: “how key customers perceive us is a burning issue.” This is consistent with the literature that distinguishes between primary and secondary stakeholders on the basis of their direct and indirect impact on the cost and revenue structures of an organization, respectively (see for discussion Clarkson, 1995; Freeman, Wicks, & Parmar, 2004). 3. Resource-based view The RBV of the firm has become one of the most widely accepted theoretical perspectives in the strategic management field (Newbert, 2007). RBV theory views firm-specific resources and capabilities as the cornerstone of competitive advantage and firm performance (e.g., Barney, 1991; Conner, 1991; Peteraf, 1993). Resources are the firmcontrolled asset stocks that are used as inputs to organizational processes and constitute the raw materials available to the firm (e.g., Black & Boal, 1994; Makadok, 2001; Peteraf, 1993), while capabilities are a firm's complex bundles of skills that enable the firm to make the best use of its assets (Amit & Shoemaker, 1993; Day, 1994; Teece, Pisano, & Shuen, 1997). The deployment of the idiosyncratic bundles of resources and capabilities available to the firm can lead to positional advantages such as low-cost/price and differentiation (Barney, 1991; Grant, 1991). Specifically, a competitive advantage exists when a firm's offering can be produced/marketed at lower costs/price and/or is perceived to have superior value, relative to extant offerings by competitors (Conner, 1991; Day & Wensley, 1988; Hunt & Morgan, 1995). Positional advantages achieved by a firm are sustained by the inability of competitors to acquire and deploy a similar or substitute mix of resources and capabilities (Day, 1994; Dierickx & Cool, 1989; Mahoney & Pandian, 1992). Thus, the RBV emphasizes competitive advantage as central to explaining differences in performance outcomes across firms. Though the RBV framework was originally developed in domestic markets, the export market context offers a fertile area for applying the RBV because it meets its two core assumptions: heterogeneity and immobility of resources/capabilities (Barney, 1991). Specifically, the RBV is based on the assumption of heterogeneity among firms. The more heterogeneous the firms are that compete in the market, the more critical resources and capabilities become to the achievement of positional advantages and enhanced performance results. Exporting firms are typically more heterogeneous than firms in domestic markets because they operate in different cultures (Morgan et al., 2006). Also, a firm's distinctive export capabilities are rooted in its employees' skills and knowledge with respect to the complex international market

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environment (Hall, 1993; Petersen, Pedersen, & Lyles, 2008), which are difficult and/or expensive for other exporters to match or imitate. Notably, the RBV literature underscores the importance of identifying specific resources and capabilities that are valuable in a particular research context (e.g., Ling-Yee & Ogunmokun, 2001; Morgan et al., 2006; Zou et al., 2003). Further, survey research undertaken in the context of the RBV of the firm is essentially based on managerial perceptions of the firm's superiority in resources and capabilities, its competitive advantage position, and the performance outcomes achieved in the market it has chosen to operate (e.g., Danneels, 2008; Morgan et al., 2004; Newbert, 2008; Vorhies & Morgan, 2005).1 To identify specific resources and capabilities important in enhancing the corporate image of a firm, we supplemented our literature review with qualitative in-depth interviews. The fieldwork pointed to the need for sufficient working capital and extensive customer relationship building activities in developing a corporate image advantage and successfully competing in the targeted industrial export market. Thus, while several types of firm resources and capabilities have been identified in the extant literature (e.g., Morgan et al., 2006; Zou et al., 2003), we focus on two specific sources of corporate image advantage in exporting, these being export financing resources and relationship management capabilities. Their role in driving export venture performance is explained below.

4.2. Financial resources and corporate image advantage The RBV literature suggests that financial resources play a vital role in enabling export ventures to effectively compete in export markets (Kaleka, 2002; Ling-Yee & Ogunmokun, 2001). Corporate image advantage refers to the degree to which export management believes that its business in the export venture market achieves a more favorable image position among export customers than competitors do (cf. Zou et al., 2003). Given the relatively high working capital and financial liquidity requirements of industrial export operations, it is not surprising that our fieldwork illustrated that one of the most notable characteristics of successful export ventures in terms of image is the level of financing that can be accessed and the timeframe within which this can be deployed. Although the meaning of a corporate brand ultimately consists of the beliefs, perceptions, and attitudes on individuals' minds (i.e., brand reputation), this meaning is (ideally) initially developed and continually influenced by marketers (Fombrun & Shanley, 1990; Jaju, Joiner, & Reddy, 2006). Thus, export management needs to engage in explicit image-building activities (e.g., advertising, sponsorships, and promotional efforts) to develop the belief that the corporate image of the firm is positively perceived by foreign customers (cf. Fombrun, 1996; Schumann, Hathcote, & West, 1991). Availability of ample funds devoted to the export venture can allow for the financing of those activities. Therefore, it is possible to advance that:

4. Research hypotheses 4.1. Financial resources and relationship management capabilities Financial resources refer to the ability of the export venture to access cash and capital (e.g., Gomez-Mejia, 1988), while relationship management capability concerns the export venture's ability to provide superior support to export distributors and to develop a close relationship with them (Kaleka, 2002). In the absence of adequate stock of financial resources, companies may be find it difficult to develop and deploy such a distinctive competence in export market venture operations characterized by geographical separation between export manufacturers and foreign distributors. Specifically, the establishment and development of close foreign customer relationships require a series of relationship building interactions and socialization efforts (Samiee & Walters, 2003; Skarmeas, Katsikeas, Spyropoulou, & Salehi-Sangari, 2008). But the physical distance that typically separates exchange partners in international markets makes personal visits and face-to-face contact difficult and expensive (Bello & Gilliland, 1997; Samiee & Walters, 2006). Also, understanding and satisfying the requirements of distributors in export markets is a time-consuming, human-intensive task (Bello, Chelariou, & Zhang, 2003; Skarmeas & Robson, 2008). Superior export finance could mean employing sufficient staff specializing in the export function, investing in training programs for export personnel, and/or allocating more employees to foreign customer support functions (Bonaccorsi, 1992). The provision of high levels of support to foreign distributors and development of close overseas business relationships is a cost-incurring process (Katsikeas, Skarmeas, & Bello, 2009). Export ventures with sufficient financial resources may therefore be in a comparatively strong position to effectively fund the relationship management activities required to offer superior customer service overseas and forge strong foreign customer relationships. Based on this discussion, it is hypothesized that: H1. Superiority in financial resources will be positively related to the development of superior relationship management capabilities in export ventures. 1 Thus, we use the term corporate image throughout the manuscript, but explicitly acknowledge that it refers to construed corporate image (how a manager perceives others see the firm). This is also the case for financial resources, relationship building capabilities, and export performance (they refer to managers’ perceptions).

H2. Superiority in financial resources will be positively related to the achievement of a corporate image advantage position in export markets. 4.3. Relationship management capabilities and corporate image advantage The exporter's capability to provide superior support to overseas customers and establish and maintain close overseas customer relationships has two major functions: customer service and market sensing (Day, 1994). The meaning of a corporate brand resides in the minds of customers, based on what they have learnt, felt, seen, and heard over time (Aaker, 1991; Keller, 2003). Hence, the provision of superior customer service by an exporting firm is expected to have a positive influence on foreign distributors' impressions and assessments of how well the firm abides by its obligations and meets customers' expectations in comparison to existing rivals. Also, to attain a corporate image advantage, it is critical that a firm understands how customers perceive it and how important various firm and product characteristics are to them (i.e., what associations are central, enduring, and distinctive) (Brown et al., 2006). However, understanding customer perceptions and requirements is often difficult within the context of export markets because of the challenge facing managers to acquire accurate and timely foreign customer information (Dow & Karunaratna, 2006; Johanson & Vahlne, 1990; Katsikeas et al., 2009). The development of close working relationships with overseas partners can facilitate continuous bidirectional information flows (Inkpen & Dinur, 1998; Robson, Skarmeas, & Spyropoulou, 2006; Simonin, 1999; Solberg, 2008), potentially enhancing customer knowledge (Autio, Sapienza, & Almeida, 2000; Salk & Lyles, 2007). This in turn can help the firm achieve a corporate image advantage position by focusing on those aspects perceived as valuable by overseas customers. Hence, the following hypothesis can be developed: H3. The development of superior relationship management capabilities will be positively related to the achievement of a corporate image advantage position in export markets. 4.4. Corporate image advantage and performance In this study, we measured export venture performance in terms of efficiency (i.e., financial indicators such as return on investment and

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return on sales and profit margin) and effectiveness (the extent to which financial goals are achieved) aspects. A variety of potential benefits of good corporate image provide the rationale for expecting a positive relationship between corporate image advantage and performance. Specifically, achievement of an image advantage position in the export market can be associated with overseas customers' loyalty (cf. Andreassen, 1998; Dick & Basu, 1994; McAlexander, Schouten, & Koenig, 2002). This facilitates new product introductions, reinforces sales force effectiveness, enhances the likelihood of success of recovery strategies in the event of crises (Dowling, 2001), and thus affords the firm the opportunity to secure a large market share and/or charge a premium for the offering in the export market (Morgan et al., 2004; Zou et al., 2003). Based on these considerations, it is possible to formulate the following hypothesis: H4. The achievement of a corporate image advantage position will be positively related to export venture performance. 5. Methodology 5.1. Research context and design The research hypotheses were tested in a mail survey of Greek exporting manufacturers trading directly with foreign distributors. Overseas distributors are the most common foreign market entry mode adopted by manufacturers, mainly because this approach offers low-cost access to overseas markets (Bello & Gilliland, 1997; Skarmeas, 2006). A multi-industry sample was used covering the three largest exporting sectors in Greece: food and agricultural products; clothing and footwear; and plastic and metal products (Panhellenic Exporters Association, 2007). In terms of export destination, we focused on the E.U., non-E.U. European countries, and North America since they constitute the primary export market regions for Greek manufacturers (Panhellenic Exporters Association, 2007). The goal was to ensure a sample size large enough to permit a rigorous analysis of the data and enhance the generalizability of the study results (Cannon & Perreault, 1999). The unit of analysis is the export venture, namely, a specific product or product line that is exported to a specific foreign market. Exporting companies typically have various export product-market ventures and considerable differences are likely to exist among a firm's export ventures in terms of resources and capabilities, corporate image, and performance outcomes (Morgan et al., 2004). Therefore, any attempt to collect data on the study constructs by asking participants to provide responses using all export ventures of the company as the frame of reference would lead to confounding results (e.g., Cavusgil & Zou, 1994; Katsikeas, Leonidou, & Morgan, 2000). Further, particular emphasis was placed on the identification and selection of the most appropriate or key informant in each of the exporting firms targeted in the study to complete the survey questionnaire. Key informants are those organizational members who are both knowledgeable of and willing to report on the phenomenon being examined (Campbell, 1955). Our fieldwork suggested that typically a single manager was responsible for dealing with the export venture. 5.2. Field interviews and questionnaire development We used two different sources in order to develop appropriate measures, which tap effectively the domain of each construct. One source concerned an extensive search of the pertinent literature; the second source concerned pre-study field interviews with practitioners in exporting firms. The review of the literature suggested that most measures for the constructs in the conceptual model could be adapted and deployed in the present empirical setting. Based on this procedure, an extensive set of items was initially generated to measure

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the study constructs. These items were submitted to a systematic purification process through field interviews, along with the use of Zaichkowsky's (1985) approach and pre-tests. The items that survived this process were included in the questionnaire and constituted the measures for the study constructs. In-depth interviews with 11 managers in exporting firms were conducted. The interviews lasted between 1 and 2 h. The primary objectives of the exploratory interviews were to: develop an understanding of the particular characteristics of the empirical setting; establish the relevance of the constructs under investigation to the specific context of exporting; and examine the plausibility of hypothesized linkages between constructs on the basis of initial managerial perceptions. Interviewees were encouraged not only to express their views, but also to debate them. Indeed, one of the interviewed managers stated: “Corporate brands are more important today than ever, our competitor is no longer just the other firm down the street, the sure-fire way is to make the company known, distinct, and credible overseas”. Another export manager noticed: “Money is needed through every step of the process, from designing a new logo, updating the web page and brochure printing, to communicating out there what is important and unimportant for the firm”. Further, an export executive stressed: “My premise is that customers remember the image of the company longer than any product information”. The fieldwork also indicated that senior executives typically do not allow individual export venture managers to switch export ventures and that export managers report to these executives the results of the export venture at the end of each year. Interestingly, managers expressed concerns about whether superiority in resources and capabilities affects corporate image and performance in export markets or vice versa. At this point we identified the need for the use of a time lag in the examination of the impact of resources and capabilities (input constructs) on competitive advantage achieved and in turn performance (output constructs). The interviews also ensured that managers could easily understand all study constructs and the items employed to capture them. A draft questionnaire was developed on the basis of an extensive review of the pertinent literature and exploratory interviews. Academics familiar with research in the relevant fields judged the extent to which each questionnaire item was representative of the construct of interest and appraised the content validity of the measures selected (Zaichkowsky, 1985). This process led to the elimination of the items regarded as “not representative.” Then, the revised questionnaire was tested in personal interviews with nine managers who had considerable experience with exporting and involvement in their company's export operations. Their responses suggested that the questionnaire was appropriate for the data collection requirements of this study. Finally, a pilot study was conducted. No major problems were revealed with regard to the clarity of instructions, response formats or the length of the questionnaire, ensuring that the questionnaire was ready for dispatch. 5.3. Construct operationalization Multi-item scales were used to operationalize all variables. Also, seven-point relative response formats were employed to capture participant responses for each item. The rationale for this lies in that the RBV purports that superior resources and capabilities should lead to the achievement of competitive advantage and superior performance outcomes. A firm's superiority in resources, capabilities, competitive advantage, and performance outcomes is meaningful only if it is benchmarked against competition (e.g., Barney, 1991; Day & Wensley, 1988; Hunt & Morgan, 1995; Newbert, 2008; Vorhies & Morgan, 2005). Additionally, our fieldwork revealed that the managers responsible for an export venture typically had broad knowledge about the foreign market. Knowledge of the main competitors (e.g., strengths and weaknesses of main competitors, intensity of

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competition, promotion campaigns and wars) was considered sine qua non in developing export venture marketing programs and strategies. Also, the use of relative resources, capabilities, image, and performance measures is fully consistent with the extant literature (e.g., Danneels, 2008; Kaleka, 2002; Morgan et al., 2004; Newbert, 2008; Vorhies & Morgan, 2005; Zou et al., 2003). The measurement approach for each theoretical construct in our model is described below. 5.3.1. Financial resources Five items were used to assess the level of financial resources devoted and available to the export venture, the speed of getting access to them, and the ability to find additional funding relative to those of the major competitors in the export venture market. The items were drawn from prior research (Kaleka, 2002; Ling-Yee & Ogunmokun, 2001; Morgan et al., 2006). A seven-point rating scale, ranging from (− 3) “Much Worse”, through (0) “About the Same”, to (3) “Much Better”, was used to capture participant responses for each item. 5.3.2. Relationship management capabilities Five indicators were employed to evaluate the competence of export management in satisfying customer requirements, providing them with high levels of support, adding value to their business, and working closely with them relative to those of the major competitors in the export venture market. The items were borrowed from previous studies in the field (Morgan et al., 2004; Zou et al., 2003). The respondents answered on a 7-point scale, with (− 3) indicating “Much Worse”, (0) indicating “About the Same”, and (3) indicating “Much Better”. 5.3.3. Corporate image advantage Three items were used to measure the image position of an exporting firm's business in the export venture market (brand image, awareness, and personality) in comparison with its main direct competitors, drawing mainly from the study of Zou et al. (2003). We used a seven-point rating scale, ranging from (− 3) “Much Worse”, through (0) “About the Same”, to (3) “Much Better”, to assess managers' perceptions about the image of their firms. 5.3.4. Export performance Four indicators were used to tap the current performance of the export venture, relative to the performance of their major competitors in the export market. The items (return on investment, return on sales, profit margin, and reaching financial goals) were borrowed from Zou et al. (2003) and Morgan et al. (2006). The respondents answered on a 7-point scale, with (−3) indicating “Much Worse”, (0) indicating “About the Same”, and (3) indicating “Much Better”. Consistent with prior empirical studies (e.g., Bello & Gilliland, 1997; Cavusgil & Zou, 1994; Morgan et al., 2004), we used self-reported (perceptual) measures of export venture performance for a number of reasons. First, the exploratory interviews revealed that managers in exporting firms had difficulty in disclosing objective export venture performance data. Second, formal financial statements and reports of companies do not provide information regarding the performance of individual export ventures (Katsikeas et al., 2000). Third, previous studies in the strategy field have indicated that perceptual measures can be reliable and valid indicators of performance (Dess & Robinson, 1984; Venkatraman & Ramanujam, 1987). 5.4. Data collection The sampling frame was developed from complementary lists of exporting manufacturers in Greece that were provided from (1) the Panhellenic Exporters Association (PEA), (2) the Athens Chamber of Commerce and Industry, and (3) the Exporters' Association of Northern Greece (SEVE). Using a systematic random sampling procedure, 1000 export manufacturing firms were selected for inclusion in the study

sample. Extensive telephone screening was used to purify the sample. Each of the selected firms was contacted by telephone in order to: make sure that the company was still operating and its address was correct; establish that the firm had ongoing export venture operations through overseas distributors for five years or longer; locate an appropriate key informant by name and title; and pre-notify the execution of the study, explain its objectives, and request their participation. After multiple telephone calls a total of 312 companies were excluded because of incorrect conduct details, exporting for less than five years or through a trading company, and corporate policy of no participation. The questionnaire, together with a pre-paid self-addressed envelope, was mailed to the key informant in each of the 688 firms who satisfied our research criteria. All respondents were assured that their answers would be treated as confidential and were offered a summary of the main findings after the completion of the study, as an incentive to participate. Reminder “thank you” postcards were sent to the managers targeted in the study, and this was followed by two additional waves of questionnaires to those who had not responded. This procedure resulted in 451 responses. Of those, eight questionnaires were excluded because they had considerable missing data, and another 24 responses were dropped because they did not pass the post hoc informant quality tests. Therefore, a response rate of 60.9% (419 out of 688 eligible firms) was achieved at time 1, which compares favorably with those reported in the vast majority of exporting studies (see Leonidou et al., 2002). Data on export corporate image advantage and performance outcomes achieved were gathered one year later. The selection of an appropriate time lag is an important issue in this study. It should be noted that there is no theory-based logic in the literature regarding the length of time interval within which the impact of export venture resources and marketing capabilities on corporate image and performance could be identified. In the general management literature, the time lag of longitudinal research designs is commonly selected for reasons of convenience (Kenny, 1975). A review of studies using longitudinal methods in management research reveals considerable variation in the time intervals employed, ranging usually from one month to a year. As in the study of Skarmeas, Katsikeas, and Schlegelmilch (2002), we selected one year as the time lag in this research. It is important to note that the exploratory interviews suggested that performance outcomes in export markets could change considerably within a period of one year. We used three mailings, together with reminder “thank you” postcards, to collect the data at time 2. The 419 firms that responded at time 1 were targeted. The organizational member requested to fill in the questionnaire here was the line manager of the key informant at time 1. Typically, the key informant at time 1 was an export manager. So, the key informant at time 2 was the executive to whom the export manager reports. The pre-study interviews suggested that these executives had good knowledge of their firms' export venture programs and strategies and foreign market conditions. In addition to addressing causality issues, the purpose for collecting data on corporate image and performance at time 2 is to eliminate concerns about common method bias, a common issue among cross-sectional studies that use a single informant. After a series of telephone calls, of the 419 participant companies at time 1 a total of 335 line managers completed the study questionnaire at time 2. Nine questionnaires were dropped as they had considerable missing data and another 15 were eliminated because they failed the informant quality checks. Therefore, a total of 311 usable responses containing longitudinal data were received, constituting a response rate of 74.2% (311 out of 419 firms). Of these, 138 exporting firms were involved in the trading of industrial products, which provided the focus of this study. 5.5. Informant quality At the end of the questionnaire used to collect data at time 1, we included four items measured with seven-point scales that evaluated

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the informant's: (1) knowledge of the export venture's strategies, resources and capabilities; (2) knowledge of the major competitor's strategies, resources and capabilities in the export venture market; (3) involvement in relevant export venture decisions and strategies; and (4) confidence in answering the questions in the study questionnaire. A total of 24 questionnaires that exhibited a value lower than 4 for at least one of these questions was eliminated. Similarly, the final part of the questionnaire at time 2 had four questions that assessed the informant's: (1) knowledge of the export venture's activities, strategies and performance; (2) knowledge of the major competitor's activities, strategies and performance in the export venture market; (3) familiarity with the export venture business; and (4) confidence in answering the questions in the survey questionnaire. In this case, 15 questionnaires were dropped. This procedure ensured that the questionnaires used for data analysis were provided from informants competent enough to report on the issues under investigation (e.g. Cannon & Perreault, 1999; Skarmeas et al., 2002). 5.6. Nonresponse bias The issue of nonresponse bias was addressed in two independent tests. First, the dimensions of the study constructs and certain firm characteristics (i.e., number of employees, annual sales, years of exporting experience and export-to-total sales ratio) of early respondents were compared to those of late respondents. Second, respondents in this study were compared with a random group of 35 non-responding companies with regard to specific firm characteristics such as employee number, years of exporting experience, and export ratio. In both cases no significant differences were detected, suggesting that the empirical findings of the present study are not limited by nonresponse bias.

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Table 2 Measurement model results. Factor and items

Standardized estimate

t-value

.87 .93 .91

–a 14.66 14.15

.88

13.26

.89

13.40

.83

–a

.93

13.50

.90 .89

12.53 12.50

.82

10.79

Corporate image advantage Brand image Brand awareness Brand personality

.88 .95 .88

–a 15.08 13.22

Export performance Return on investment (ROI) Return on sales (ROS) Export venture margins Reaching export venture financial goals

.80 .85 .82 .77

–a 9.71 9.44 8.68

Financial resources Level of financial resources available Access to capital Speed of acquiring and deploying financial resources Size of financial resources devoted to this export venture Ability to find additional financial resources when needed Relationship management capabilities Attracting and retaining the best distributors in the export venture market Satisfying the requirements of distributors in this export market Adding value to distributors’ business Closeness in working with distributors/ retailers in this market Providing high levels of support to distributors

a

ρc

ρv

.90

.64

.89

.62

.85

.66

.82

.53

Item fixed to set the scale.

6. Data analysis 6.1. Measure validation Following Nunnally and Bernstein's (1994) protocol for measure validation and purification, we first examined the reflective scales using exploratory factor and reliability analyses and then using confirmatory factor analysis. This is a well-established practice in empirical marketing research. Exploratory factor analysis produced strong individual loadings on each factor and low cross-loadings. Reliability analysis showed that the Cronbach's alpha scores of the study constructs ranged from .88 to .95. Table 1 presents the zeroorder correlations of the study constructs, along with their alpha scores and descriptive statistics. Then, a measurement model was run using EQS (Bentler, 1990) for the four constructs of export financial resources, relationship management capabilities, corporate image advantage, and performance. The results displayed in Table 2 illustrate that the construct composite reliabilities (ρc) and average variances extracted (ρv) ranged from .82 to .90 and .53 to .66, respectively; all these are well above the recommended thresholds (Fornell & Larcker, 1981). Also,

Table 1 Correlation matrix, reliability estimates, and descriptive statistics. Measures Financial resources Relationship management capabilities Corporate image advantage Export performance α Mean SD ⁎ p b .05. ⁎⁎ p b .01.

X1 X1 X2 X3 X4

1.00 .29⁎⁎ .34⁎⁎ .21⁎ .95 4.14 1.34

X2

X3

X4

1.00 .32⁎⁎ .39⁎⁎ .94 4.74 1.25

1.00 .33⁎⁎ .93 4.94 1.25

1.00 .88 4.63 1.09

the model diagnostics suggest a good model fit. The chi-square (χ2 = 136.87) is not statistically significant (p = .063) for 113 degrees of freedom, and other diagnostics include, a normed fit index (NFI) of .95, a nonnormed fit index (NNFI) of .99, a comparative fit index (CFI) of .99, an incremental fit index (IFI) of .99, a root mean squared error of approximation (RMSEA) of .039, and an average off-diagonal absolute standardized residuals (AOSR) of .033. All standardized estimates are significant and large (the lowest t-value is 8.68), which provides evidence of convergent validity (Gerbing & Anderson, 1988). Also, pair-wise comparisons of the constructs indicated that the confidence interval (plus/minus two standard errors) around the correlation estimate for each pair of constructs never includes 1.00, which suggests discriminant validity (Gerbing & Anderson, 1988). In sum, the study measures were subjected to rigorous validation procedures and were found to exhibit adequate measurement properties. 6.2. Results 6.2.1. Structural model The research hypotheses were tested using structural equation modeling (Bentler, 1990). The results presented in Table 3 indicate that the overall fit of the model is good (χ2(115) = 150.04, p = .016, NFI = .95, NNFI = .98, CFI = .99, IFI = .99, RMSEA = .047, and AOSR = .064). In support of H1, superiority in financial resources is positively related to superior relationship management capabilities (β = .30, t = 3.15). Consistent with H2, superior financial resources have a positive effect on the achievement of corporate image advantage (β = .27, t = 2.81) in the export venture market. Likewise, superior relationship management capabilities positively affect corporate image advantage achieved (β = .26, t = 2.74), in accord with H3. As predicted in H4, corporate image advantage is positively associated with enhanced export venture performance outcomes

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Table 3 Structural equation model results. Hypotheses

Standardized estimate

t-value

Financial resources → relationship management capabilities Financial resources → corporate image advantage Relationship management capabilities → corporate image advantage Corporate image advantage → export performance

.30

3.15⁎

.27 .26

2.81⁎ 2.74⁎

.36

3.61⁎

⁎ p b .01.

(β = .36, t = 3.61). Overall, the proposed model explains 19% and 13% of the observed variance of corporate image advantage and performance, respectively. 6.2.2. Mediation tests In line with the RBV framework, our conceptual model suggests that corporate image advantage mediates the effect of financial resources on performance. An alternative specification might posit that financial resources have a direct influence on performance.2 As per Bagozzi and Yi (1988), this possibility was considered via comparing the change in the model's chi-square results when a path was added from financial resources to performance and subsequently the path of financial resources to corporate image advantage was dropped. In no case did the model fit improve (χ2(114) = 149.24 and χ2(115) = 156.39, respectively) or was the financial resources to corporate image advantage path found to be significant (t = 1.10, p b .05 and t = 1.24, p b .05, respectively), which suggests that the rival models do not explain the data as well as the proposed structural model (χ2(115) = 150.04). 7. Discussion Good corporate brands have become a strategic mandate nowadays because of their potential for value creation for the incumbent firms. However, our understanding of the role of corporate image in an international context is limited. This is a critical gap in the literature given the increasing trend toward globalization, along with the additional ramifications of managing corporate associations in foreign markets. In addressing this knowledge void, this study investigates antecedents and performance outcomes of corporate image in export markets. Drawing on the RBV of the firm, we view corporate image advantage as a driver of enhanced export performance and an outcome of superior export financial resources and relationship management capabilities. Our data indicate strong overall support for RBV theory predictions. Identification of sources and performance outcomes of corporate image advantage achieved may offer international business practitioners valuable insights into successful corporate brand management and stimulate future research in this important, but understudied, area. A discussion of the study findings follows. The study results suggest that possession of sufficient financial resources is conducive to the deployment of relationship management capabilities in export markets. This finding is linked to empirical findings in the relationship marketing literature suggesting that developing close and enduring customer relationships is a costly process (e.g., Cannon & Homburg, 2001; Reinartz & Kumar, 2000). It is also consistent with existing evidence from research on service quality indicating that a considerable amount of investment is needed if an organization opts for providing superior customer support (e.g., Roth & Jackson, 1995; Rust, Zahorik, & Keiningham, 1995; Zeithaml, Berry, & Parasuraman, 1996). Notably, the physical and cultural

2

We thank an anonymous reviewer for drawing our attention to this issue.

distances commonly present in international channels of distribution result in lengthy channel structures and longer lead times, increasing the difficulty and costs of servicing organizational customers overseas and call for possession and deployment of higher levels of financial resources (Skarmeas et al., 2008). Further, the study findings show that, in accordance with RBV theory prescriptions, the achievement of a corporate image advantage position by an exporting firm is driven by its superiority in financial resources. This result corroborates findings from branding research highlighting the importance of investing in marketing programs to develop and manage brand equity (e.g., Aaker, 1991; Keller, 2003; Simon & Sullivan, 1993). While in the not too distant past corporate branding was of peripheral concern to top management, nowadays being seen as a corporate “good guy” has become a critical strategic task (Brown & Dacin, 1997; Fombrun, 1996). An increasing number of organizations devote considerable financial resources every year to corporate advertising, corporate philanthropy, sponsorships, causerelated marketing, and public image studies in an attempt to favorably influence corporate associations and burnish their corporate image (e.g., Biehal & Sheinin, 1998; Dowling, 2001; Schumann et al., 1991). In keeping with the RBV framework, the results of this study indicate that deployment of superior export relationship management skills leads to the achievement of a corporate image advantage position. An exporting firm's strong customer relationship building capabilities help the firm understand foreign market characteristics and customer attitudes and behavior (Bello et al., 2003; Robson et al., 2006), which appears to be an important contributor to the development of a corporate image advantage position. The difficulties inherent in replicating a strong foreign customer relationship appear to account for their value in nurturing a good corporate image. It is critical that export managers develop competence in managing international channel partnerships effectively—inattention to overseas distributor relationships has been identified as a major reason for unsuccessful export results (Styles & Ambler, 2000). The study findings also suggest a strong positive relationship between corporate image advantage and export venture performance results. Consistent with the RBV theory of the firm (e.g., Barney, 1991; Peteraf, 1993), the competitive advantage literature (e.g., Li & Li, 2008; Porter, 1985), and the corporate reputation literature (e.g., Gurhan-Canli & Batra, 2004; Roberts & Dowling, 2002; Walsh, Mitchell, Jackson, & Beatty, 2009), this finding implies that firms have a greater chance of attaining superior performance outcomes if they possess relatively good image in the marketplace. This is particularly important given managers' need to appraise the potential payback from strategic corporate brand-building investments not only in terms of higher goodwill among regulators, potential employees, and the public at large, but also in terms of financial performance. It seems that in seeking to understand and explain the increasingly important export venture performance of firms, researchers and managers can use the RBV to guide diagnostic and evaluative efforts in planning and organizing exporting activities. 8. Limitations and future research directions The study findings should be viewed in the context of certain limitations that need to be taken into consideration. First, this research was conducted in the specific context of exporting activities of manufacturing firms in Greece. Strictly, the present empirical findings are limited to the operations of Greek exporting manufacturers; therefore, one should be careful in applying these findings to other empirical settings. Also, the study results are based on three industrial sectors and caution should be exercised in applying the present findings to other industries. In a similar vein, different types of international business arrangements, such as joint ventures, strategic alliances, licensing and franchising arrangements, and multinationals were not included in this study. To test the extent to which the

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findings of this study can be generalized, future research efforts should replicate this study in other national contexts, different industrial sectors, and other forms of foreign market entry. Second, the present study centered on superior export financial resources and relationship management capabilities and their effects on corporate image advantage achieved in export venture markets. A natural extension of this research would be to identify and include other forms of resources and capabilities and examine their role in driving corporate image advantage in export ventures. Additional types of resources such as human, physical, relational, experiential, and cultural resources and capabilities including informational, innovative, product development, pricing, and communication capabilities (see Newbert, 2007) can be considered to play a facilitating role in establishing and developing corporate image advantage. Also, future research may investigate the role of inimitability and substitutability characteristics of the resources and capabilities available to the export venture (Morgan et al., 2006) in providing an enduring corporate image advantage position. Third, our cross-sectional data on corporate image advantage and performance restricts our ability to ascertain causal relations between the constructs. Though our line of reasoning and treatment of performance as an outcome of corporate image advantage is in full concert with the basic tenets of the RBV, it is conceivable that a reverse or reciprocal sequence of events is taking place as they both may be viewed as causes for, as well as results of each other. Hence, an important direction for future research concerns collecting longitudinal data on corporate image advantage and performance with a view to detecting the causal inferences involved in the corporate image advantage–performance link. Fourth, we focused solely on construed corporate image and did not take into account intended corporate image and actual corporate reputation (Brown et al., 2006). Organizations should not only be concerned about the image they project and how to manufacture it, but also need to discern how they are being received and how those perceptions square with their self-image. Thus, a worthwhile issue for further research is to shed light on potential perceptual convergence or divergence among intended corporate image, construed corporate image, and actual corporate reputation. Despite the daunting practical problems of generating such data in an international context, such an effort would provide a comprehensive picture of the issues under investigation. This would greatly assist in the advancement of management theory and practice in the field.

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