Behind make or buy decisions in export strategy

A replication and extension of Trabold

Mike W. Peng, Yuanyuan Zhou, Anne S. York

Research output: Contribution to journalArticle

28 Citations (Scopus)

Abstract

Given the centrality of make or buy decisions in transaction cost theory, it is important to understand the factors that influence managers' choices. The empirical evidence to date is unclear as to what conditions influence export managers' choices to "make" (the direct mode of establishing in-house export channels) versus "buy" (the indirect mode of outsourcing certain services to intermediaries). Peng and Ilinitch [Peng, M. W., & Ilinitch, A. Y. (1998). Export intermediary firms: A note on export development research. Journal of International Business Studies, 29(3): 609-620] propose a transaction cost-based theory of export intermediation. They suggest that market distance and product complexity are the two primary driving forces behind exporters' decision to "buy" by engaging export intermediary firms. Their hypotheses have been tested and partially supported by Trabold [Trabold, H. (2002). Export intermediation: An empirical test of Peng and Ilinitch. Journal of International Business Studies, 33(2): 327-344] based on French data. Using a new archival database covering 185,731 export transactions over a two-year period, we replicated Trabold's work using U.S. firm data. Our findings are similar. This strengthens the reliability and validity of Peng and Ilinitch's theory as well as the generalizability of Trabold's findings to a more global context. Overall, given both the importance and paucity of replication work in the strategy literature, this study serves as an example of how export strategy research can advance through cumulative empirical efforts.

Original languageEnglish
Pages (from-to)289-300
Number of pages12
JournalJournal of World Business
Volume41
Issue number3
DOIs
StatePublished - Sep 2006
Externally publishedYes

Fingerprint

Make or buy decisions
Export strategy
Replication
Intermediaries
Intermediation
Business studies
Managers
International business
Exporters
Empirical test
Centrality
Data base
Driving force
Transaction costs
Transaction cost theory
Service outsourcing
Generalizability
Product complexity
Empirical evidence
Influence factors

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Marketing
  • Finance

Cite this

Behind make or buy decisions in export strategy : A replication and extension of Trabold. / Peng, Mike W.; Zhou, Yuanyuan; York, Anne S.

In: Journal of World Business, Vol. 41, No. 3, 09.2006, p. 289-300.

Research output: Contribution to journalArticle

Peng, Mike W. ; Zhou, Yuanyuan ; York, Anne S. / Behind make or buy decisions in export strategy : A replication and extension of Trabold. In: Journal of World Business. 2006 ; Vol. 41, No. 3. pp. 289-300.
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