Sustaining Small Exporters’ Performance: Capturing Heterogeneous Effects of Government Export Assistance Programs on Global Value Chain Informedness

Abstract

The previous literature extensively highlighted the importance of export promotion programs (EPPs) provided by governments to enhance small- and medium-sized enterprises’ (SMEs) export performance. However, the literature still (1) lacks sufficient depth in analysing the way different types of EPPs sustain SME export performance and (2) suffers from the absence of an EPP portfolio that guides an efficient resource allocation for different EPP types. To fill these gaps, our study (1) developed a research model that integrates three different types of EPPs and (2) tested their indirect impacts on sustainable export performance via global value chain informedness, which is a largely ignored but indispensable capability in exporting. Using a partial least-squares equation model (PLS SEM) method to analyze 156 samples collected from 1st of October to 31st of December of 2018 by accessing Korean SMEs’ export managers, our model addresses the different roles of EPP types and also the part of the SME value chain informedness that acts as a critical enabler for sustaining export performance. Furthermore, by complementing the PLS SEM with an importance and performance analysis matrix (IPA matrix), we provide an action plan that guides an appropriate resource allocation to different types of EPPs. In theory, we provide an explanation for how different EPPs work for SMEs via the value chain informedness of SMEs for the export performance. We further capture such EPPs operating over the longer term, with a lasting export performance of SMEs so as to supply a sounder theoretical rationale for the EPP provision. The action plan delivers strategic implications for policy makers dealing with export-assistance programs operations. With the importance of global network involvement and communication with foreign partners, the incorporation of value chain informedness uncovers the necessity of interfirm network-focused informedness in international business literature.