Determinants of LDC Exporters' Performance: A Cross-National Study
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Carlos G. Sequeira** Central American Institute of Business Administration (INCAE)
Abstract. The success of export-led development initiatives in LDCs depends heavily on export diversification. This paper identifiesthree patternsof performanceamong Central American firms engaged in non-traditional exports. Each pattern is associated with a distinct strategy: low involvement-low volume-low content, price-cost-volume,and product-servicequality oriented. The discussion emphasizes keys to exporter success and priority areas for public policy. Many LDCs have turned to export stimulation as a major engine of growth. A decade ago fifty less developed countries (LDCs) and newly industrialized countries (NICs) had instituted tax, import duty, licensing, financing, insurance, or marketing programs to assist exporters [UNCTAD 1982]. Their ranks have increased in the ensuing decade [World Bank 1987 & 1991]. An important reason for the spread of export-led development programs is that export growth has proven to be a major determinant of sustained GNP growth [Agarwala 1983; Lal & Rajapatirana 1987; Otani & Villanueva 1990; Scholling & Timmerman 1988]. However, the benefits of export-led development have been greater the less a nation relies on exports of basic
*Luis V. Dominguezis Professorin the Departmentof Marketingat the University of Miami.His researchinterestsincludemultinationalmarketing,macromarketing, andmarketingprocessesin developingnations.His mostrecentarticleshaveappeared in the InternationalMarketingReview,Journalof theAcademyof MarketingScience, Journal of Macromarketing,andJournal of AdvertisingResearch. **Carlos G. Sequeira is Professor of Marketingat INCAE in the Costa Rica campus. He teaches marketingstrategyand export marketingat INCAE's MBA and Advanced Executive Programsthrough Latin America. His main research interestis focused on the internationalization of the firm and the study of competitive responseof single-marketcompaniesbefore globalizedcompetitors.His most recentwork has been publishedby the InternationalMarketingReview. This study was supported by grants from the University of Miami, INCAE, and the U.S. Agency for International Development (Region of Central America and Panama). The authors thank Julia Gonzalez Chue, survey coordinator (INCAE) and Professor Duane Kujawa, University of Miami. Received: January 1991; Revised: August 1991 & March 1992; Accepted: June 1992.
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JOURNAL OF INTERNATIONALBUSINESS STUDIES, FIRST QUARTER 1993
commodities [Kavoussi 1984; Singer & Gray 1988; World Bank 1987 & 1991]. Given that prices and demand for basic commodities are unlikely to experience the growth rates of the 1950s and 1960s [Kavoussi 1985], many LDCs are attempting to diversify by encouraging non-traditionalexports, i.e., product categories which historically were not their main foreign exchange earners. Export diversification has b
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