Managerial Ties, Market Orientation, and Export Performance: Chinese Firms Experience

ABSTRACT Managerial ties (MT) are important for business performance by providing firms access to valuable resources and protecting them from opportunism. Drawing on the resource-based view and the market orientation (MO) literature, we argue that (1) MT can help exporting firms to enhance export performance; and (2) MO will help strengthen the positive effect of MT as MO directs the value of MT for improvement of competitive strategy and customer experience with a market focus on generation, dissemination, and use of market intelligence concerning existing and potential customers and competitors. Using a sample of 230 Chinese exporting firms, we found that MT is linked to superior export performance, and the link is positively moderated by MO. Therefore, this study expands our understanding of how firms can not only improve their export performance through the development of MT, but also use MO to reinforce MT and export performance association.

[1]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[2]  P. Ellis,et al.  Distance, dependence and diversity of markets: effects on market orientation , 2007 .

[3]  Mike W. Peng,et al.  How Network Strategies and Institutional Transitions Evolve in Asia , 2005 .

[4]  Choonwoo Lee,et al.  Internal capabilities, external linkages, and performance. A study on technology-based ventures , 2001 .

[5]  Mike W. Peng,et al.  Managerial Ties and Firm Performance in a Transition Economy: The Nature of a Micro-Macro Link , 2000 .

[6]  Judy A. Siguaw,et al.  Export Market-oriented Activities: Their Antecedents and Performance Consequences , 2002 .

[7]  Bernard J. Jaworski,et al.  Market orientation: Antecedents and consequences , 1993 .

[8]  Chun Zhang,et al.  Intra- and Interfirm Coordination of Export Manufacturers: A Cluster Analysis of Indigenous Chinese Exporters , 2008 .

[9]  John C. Narver,et al.  The Positive Effect of a Market Orientation on Business Profitability: A Balanced Replication , 2000 .

[10]  Justin Tan,et al.  Organizational Slack and Firm Performance During Economic Transitions: Two Studies from an Emerging Economy , 2003 .

[11]  Lawrence S. Welch,et al.  Inward-Outward Connections in Internationalization , 1993 .

[12]  K. Zhou,et al.  Competitive position, managerial ties, and profitability of foreign firms in China: an interactive perspective , 2009 .

[13]  B. Elango,et al.  Building capabilities for international operations through networks: a study of Indian firms , 2007 .

[14]  Xueming Luo,et al.  Globalization, marketing resources, and performance: Evidence from China , 2005 .

[15]  James M. Sinkula.  Market Information Processing and Organizational Learning , 1994 .

[16]  P. Ellis,et al.  Social ties and international entrepreneurship: Opportunities and constraints affecting firm internationalization , 2011 .

[17]  J. Johanson,et al.  The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership , 2009 .

[18]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[19]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[20]  M. Kotabe,et al.  Assessing Measurement Invariance of Export Market Orientation: A Study of Chinese and Non-Chinese Firms in China , 2007 .

[21]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[22]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[23]  Xueming Luo,et al.  Internationalization and the performance of born-global SMEs: the mediating role of social networks , 2007 .

[24]  Kevin Zheng Zhou,et al.  The effects of customer and competitor orientations on performance in global markets: a contingency analysis , 2007 .

[25]  Neil A. Morgan,et al.  Firm-level export performance assessment: Review, evaluation, and development , 2000 .

[26]  K. Zhou,et al.  Do managerial ties in China always produce value? Competition, uncertainty, and domestic vs. foreign firms , 2008 .

[27]  Terry S. Overton,et al.  Estimating Nonresponse Bias in Mail Surveys , 1977 .

[28]  Leonidas C. Leonidou,et al.  Marketing strategy determinants of export performance: a meta-analysis , 2002 .

[29]  Matthias Baum,et al.  Internationalization strategy, firm resources and the survival of SMEs in the export market , 2014 .

[30]  Xinming He,et al.  The determinants of export performance: a review of the literature 2006-2014 , 2016 .

[31]  Eden Yin,et al.  Persistence and Learning: Success Factors of Taiwanese Firms in International Markets , 2009 .

[32]  Clegg,et al.  The determinants of Chinese outward foreign direct investment , 2007 .

[33]  J. Barney,et al.  The resource-based view of the firm: Ten years after 1991 , 2001 .

[34]  J. Pearce,et al.  Guanxi: Connections As Substitutes for Formal Institutional Support , 1996 .

[35]  R. Subramanian,et al.  The market orientation-performance relationship in the context of a developing economy: An empirical analysis , 2001 .

[36]  K. Meyer,et al.  When and where does foreign direct investment generate positive spillovers? A meta-analysis , 2009 .

[37]  Hildy Teegen,et al.  Export Strategies and Performance of Firms from Emerging Economies: Evidence from Brazil, Chile, and Mexico , 2000 .

[38]  Bat Batjargal,et al.  Network triads: transitivity, referral and venture capital decisions in China and Russia , 2005 .

[39]  Jukka Luoma,et al.  What Counts versus what can be Counted: The Complex Interplay of Market Orientation and Marketing Performance Measurement , 2016 .

[40]  Ravi S. Achrol,et al.  Evolution of the Marketing Organization: New Forms for Turbulent Environments , 1991 .

[41]  K. Provan,et al.  Interorganizational Networks at the Network Level: A Review of the Empirical Literature on Whole Networks , 2007 .

[42]  A. Pecotich,et al.  Social Factors Influencing Export Initiation in Small and Medium-Sized Enterprises , 2001 .

[43]  Hai Guo,et al.  Managerial Political Ties and firm Performance During Institutional Transitions: An Analysis of Mediating Mechanisms , 2014 .

[44]  Li-Qun Wei,et al.  The impact of market orientation and strategic HRM on firm performance: the case of Chinese enterprises , 2008 .

[45]  K. Sauvant.  Overcoming Liability for Foreignness , 2011 .

[46]  Shaoming Zou,et al.  The determinants of export performance: a review of the empirical literature between 1987 and 1997 , 1998 .

[47]  Stanley Wasserman,et al.  Testing Multitheoretical, Multilevel Hypotheses About Organizational Networks: An Analytic Framework and Empirical Example , 2006 .

[48]  K. Zhou,et al.  How foreign firms achieve competitive advantage in the Chinese emerging economy: Managerial ties and market orientation , 2010 .

[49]  L. F. Lages,et al.  Relationship Capabilities, Quality, and Innovation as Determinants of Export Performance , 2009 .

[50]  D. Griffith,et al.  The marketing strategy‐performance relationship in an export‐driven developing economy , 2004 .

[51]  Michael Y. Hu,et al.  Market orientation among small Korean exporters , 2000 .

[52]  H. Chung,et al.  Market orientation, guanxi, and business performance , 2011 .

[53]  Gary L. Frazier,et al.  The Moderating Influence of Firm Market Power on the Transaction Cost Economics Model: An Empirical Test in a Forward Channel Integration Context , 2006 .

[54]  A. Swaminathan,et al.  Framing Interorganizational Network Change: A Network Inertia Perspective , 2006 .

[55]  Anna Kaleka.  Studying resource and capability effects on export venture performance , 2012 .

[56]  Ahmet H. Kirca,et al.  Market Orientation: A Meta-Analytic Review and Assessment of its Antecedents and Impact on Performance , 2005 .

[57]  Haiyang Li,et al.  The role of managers' political networking and functional experience in new venture performance: Evidence from China's transition economy , 2007 .

[58]  Xianggui Qu,et al.  Multivariate Data Analysis , 2007, Technometrics.

[59]  J. Pennings,et al.  Internal capabilities, external networks, and performance: a study on technology‐based ventures , 2001 .

[60]  Anne S. Tsui,et al.  Guanxi and Business , 2001 .

[61]  Moses Acquaah.  Managerial social capital, strategic orientation, and organizational performance in an emerging economy , 2007 .

[62]  P. Ellis,et al.  Social Ties and Foreign Market Entry , 2000 .

[63]  Gregory G. Dess,et al.  Measuring organizational performance in the absence of objective measures: The case of the privately-held firm and conglomerate business unit , 1984 .

[64]  Yuan Li,et al.  CEO duality, organizational slack, and firm performance in China , 2010 .

[65]  David J. Ketchen,et al.  An assessment of the measurement of performance in international business research , 2008 .

[66]  Kevin Zheng Zhou,et al.  Relational ties or customized contracts? An examination of alternative governance choices in China , 2008 .

[67]  Alan C.B. Tse,et al.  Market orientation and business performance in a Chinese business environment , 2003 .

[68]  P. Wong,et al.  When does investment in political ties improve firm performance? The contingent effect of innovation activities , 2015 .

[69]  Kevin Zheng Zhou,et al.  Market orientation, job satisfaction, product quality, and firm performance: Evidence from China , 2008 .

[70]  Rudolf R. Sinkovics,et al.  Overcoming export manufacturers’ dilemma in international expansion , 2007 .

[71]  Dovev Lavie.  The Competitive Advantage of Interconnected Firms: An Extension of the Resource-Based View , 2006 .

[72]  M. Lindell,et al.  Accounting for common method variance in cross-sectional research designs. , 2001, The Journal of applied psychology.

[73]  Justin Tan,et al.  Organizational slack and firm performance during economic transitions: two studies from an emerging economy. Justin Tan and Mike W. Peng. Strategic Management Journal24(13) 2003, 1249–1263 , 2004 .

[74]  鳥居 泰彦,et al.  世界経済・社会統計 = World development indicators , 1998 .

[75]  Risto T. Salminen,et al.  Key antecedents to "export" market-oriented behaviors: a cross-national empirical examination , 2001 .

[76]  G. Bruton,et al.  Capabilities as a mediator linking resources and the international performance of entrepreneurial firms in an emerging economy , 2010 .

[77]  Bernard J. Jaworski,et al.  Markor: A Measure of Market Orientation , 1993 .

[78]  A. Diamantopoulos,et al.  Narver and Slater, Kohli and Jaworski and the market orientation construct: integration and internationalization , 1995 .

[79]  Garry D. Bruton,et al.  International venturing by emerging economy firms: the effects of firm capabilities, home country networks, and corporate entrepreneurship , 2007 .

[80]  Bernard J. Jaworski,et al.  Market orientation: The construct, research propositions, and managerial implications. , 1990 .

[81]  Mike W. Peng,et al.  Managerial ties, strategic initiatives, and firm performance in Central Asia and the Caucasus , 2012, Asia Pacific Journal of Management.

[82]  Robert P. Leone,et al.  Is Market Orientation a Source of Sustainable Competitive Advantage or Simply the Cost of Competing , 2011 .

[83]  H. Chung,et al.  Export market orientation, managerial ties, and performance , 2012 .

[84]  David A. Griffith,et al.  The Effects of Customer Relationships and Social Capital on Firm Performance: A Chinese Business Illustration , 2004 .

[85]  Garry D. Bruton,et al.  Entrepreneurship, poverty, and Asia: Moving beyond subsistence entrepreneurship , 2014, Asia Pacific Journal of Management.

[86]  P. M. Podsakoff,et al.  Self-Reports in Organizational Research: Problems and Prospects , 1986 .

[87]  Neil A. Morgan,et al.  Antecedents of Export Venture Performance: A Theoretical Model and Empirical Assessment , 2004 .

[88]  R. Burt.  The contingent value of social capital. , 1997 .

[89]  John C. Narver,et al.  The Effect of a Market Orientation on Business Profitability , 1990 .

[90]  Thomas P. Moliterno,et al.  Network Theory of Organization: A Multilevel Approach , 2011 .

[91]  B. Uzzi,et al.  Embeddedness in the Making of Financial Capital: How Social Relations and Networks Benefit Firms Seeking Financing , 1999, The New Economic Sociology.

[92]  R. Morgan,et al.  Business performance and dimensions of strategic orientation , 2003 .

[93]  James C. Anderson,et al.  STRUCTURAL EQUATION MODELING IN PRACTICE: A REVIEW AND RECOMMENDED TWO-STEP APPROACH , 1988 .

[94]  K. Zhou,et al.  Developing strategic orientation in China: antecedents and consequences of market and innovation orientations , 2005 .

[95]  Kevin Zheng Zhou,et al.  The Effects of business and Political Ties on Firm Performance: Evidence from China. , 2011 .

[96]  Igor Filatotchev,et al.  Resource-Based and Institutional Perspectives on Export Channel Selection and Export Performance , 2013 .

[97]  Mike W. Peng.  Institutional Transitions and Strategic Choices , 2003 .

[98]  G. Hult,et al.  MARKET ORIENTATION AND PERFORMANCE: AN INTEGRATION OF DISPARATE APPROACHES , 2005 .

[99]  S. Hunt,et al.  The Comparative Advantage Theory of Competition , 1995 .

[100]  T. Elfring,et al.  Entrepreneurial Orientation and New Venture Performance: The Moderating Role of Intra- And Extraindustry Social Capital , 2008 .

[101]  P. Ellis.  Is Market Orientation Affected by the Size and Diversity of Customer Networks? , 2010 .

[102]  Eric W. K. Tsang.  Can guanxi be a source of sustained competitive advantage for doing business in China , 1998 .

[103]  Haiyang Li,et al.  R&D intensity and international joint venture performance in an emerging market: moderating effects of market focus and ownership structure , 2007 .

[104]  Yadong Luo,et al.  Guanxi and organizational dynamics: organizational networking in Chinese firms , 2001 .

[105]  Maxwell K. Hsu,et al.  The moderating role of institutional networking in the customer orientation–trust/commitment–performance causal chain in China , 2008 .

[106]  Keith D. Brouthers,et al.  Transaction cost-enhanced entry mode choices and firm performance. , 2003 .

[107]  S. Rangan.  The Problem of Search and Deliberation in Economic Action: When Social Networks Really Matter , 2000 .

[108]  S. Hunt,et al.  The Commitment-Trust Theory of Relationship Marketing , 1994 .

[109]  F. Martínez-López,et al.  The Determinants of Export Performance: A Review of the Research in the Literature between 1998 and 2005 , 2008 .

[110]  Neil A. Morgan,et al.  Experiential and Informational Knowledge, Architectural Marketing Capabilities, and the Adaptive Performance of Export Ventures: A Cross-National Study , 2003, Decis. Sci..

[111]  J. M. Cortina,et al.  Interaction, Nonlinearity, and Multicollinearity: implications for Multiple Regression: , 1993 .

[112]  S. Cavusgil,et al.  Marketing Strategy-Performance Relationship: An Investigation of the Empirical Link in Export Market Ventures , 1994 .

[113]  Charlotte H. Mason,et al.  Market orientation, marketing capabilities, and firm performance , 2009 .

[114]  Nathaniel Boso,et al.  Firm Innovativeness and Export Performance: Environmental, Networking, and Structural Contingencies , 2013 .