Intensifying Export Performance Through Planned Capacity Building: A Study of the Indian Apparel Sector

서지정보

· 발행기관 : 한국마케팅과학회
· 수록지 정보 : Journal of Global Fashion Marketing / 2권 / 1호 / 20 ~ 27페이지
· 저자명 : Soma Arora, Sanjiv Mittal

초록

The process of firms making sequential foreign direct investmentshave been an area of interest and research for long inthe field of International Business. International trade literatureis wrought with indebtedness towards FDI as a policy for economicdevelopment, especially while tracing the growth path oftiger economies in South East Asia. However, little has beenrevealed on the subject of OFDI [outward foreign direct investment]in the context of Indian or South East Asiancompanies. OFDI is better understood as Indian firms investingabroad through various methods like: marketing and sales subsidiaries,production facilities, global brand management, takeovers,acquisitions and wholly owned subsidiaries This becomesnot only a method of entering a foreign market but alsothe process of increasing foreign com-mitments in hostcountries. This draws attention to the process of internationalizationfollowed by these countries so as to capture overseasmarkets and improve the volume of international trade. Muchof the early literature on internationalization behaviour concludesthat the process involves a series of incremental ‘stages’whereby firms gradually become involved in exporting andother forms of international business. As they do so, theycommit greater resources to foreign markets and target countriesthat are increasingly ‘psychically’ distant (Johanson andVahlne, 1977). This by far is the best study on methodologyof internationalization prior to the path breaking research ofSea Jin Chang in 1992 when the process of sequential entryby Japanese firms into US had been analysed and documentedfor developing country references. This became the source andinspiration of this study. It was deemed that a background asrich and endowed as India’s history of foreign trade, shouldnaturally lead to rapid international-isation in the modern era.
The theoretical framework for the study has been drawnfrom Duning’s OLI Paradigm which relates various forms ofInternational production to the three core advantages owned bythe company – ownership, location and internalization.
Therefore the OFDI becomes a function of capacity built alongthese lines. The four significant areas of capacity building at amicro level emerges as: skilled workforce; information technol-ogy; marketing network and cumulative learning. After identifyingthese areas, the major difficulty faced by the researcherwas in terms of lack of availability of a research instrument tocollect empirical data to study these areas of capacity buildingand level of internationalisation. The next important task thereforebecame to develop a reliable and validated questionnairewhich can be used in data collection for multivariate dataanalysis. This led to development of a summated rating scalethrough factor analysis and reliability testing in a pilot studyconducted amongst exporters of Delhi / NCR. It was a tediousand cumbersome process working on so many dependent andindependent variables together. The principal component analysissignificantly reduced the complexity of this task by groupinginterdependent variables into independent factors whichwere further used in intensive data collection and inferentialstudies. The research instrument is one of the important contributionsfrom this study and detailed heavily in the paper.
To further cement the relationship between the variables afunctional concept is desired in the form of discriminantanalysis. As is known discriminant analysis is used primarilyto predict membership in two or more mutually exclusivegroups. For instance, group of exporters who built capacityduring internationalization and the group which did not. Theseare two discrete groups that can be identified using sufficientinformation from level of investments made in significant areaslike – Information Technology; marketing network; cumulativeoverseas experience and skilled workforce as the independentvariable used in the study. From these variables it is endeavouredto create a formula that differentiates or discriminatesbetween the two groups. This newly found formula – if it discriminatessuccessfully could be used to analyse the liklehoodof future prospects in capacity building.
The last section in Results and Discussion states the importantfactors which influence mature internationalization andtherefore rightful nodes for planned capacity building. It wasseen that Organisation, systems, commercial and operational capacitybuilding are best identified as investment areas for matureinternationalization. Any company having varied levels ofin-vestments in select areas of capacity building can eventuallypredict its grouping in high or low degree of internationalization-the ultimate objective of business modeling.. It is the researcher’searnest hope and desire to satisfy the superior intellectof the reader and at the same time maintain a realisticestimate of the variables on ground while unfolding the givenframework.

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