TY - JOUR
T1 - Behind make or buy decisions in export strategy
T2 - A replication and extension of Trabold
AU - Peng, Mike W.
AU - Zhou, Yuanyuan
AU - York, Anne S.
N1 - Funding Information:
This research was supported in part by the Ohio State University Center for International Business Education and Research, Fisher College of Business Research Committee, and Sun Yat-Sen University School of Business (via a 985 plan grant). An earlier version was presented at the Academy of Management in Seattle (2003). We thank Qi Zhou for research assistance.
PY - 2006/9
Y1 - 2006/9
N2 - 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.
AB - 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.
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U2 - 10.1016/j.jwb.2006.01.006
DO - 10.1016/j.jwb.2006.01.006
M3 - Article
AN - SCOPUS:33747448308
VL - 41
SP - 289
EP - 300
JO - Journal of World Business
JF - Journal of World Business
SN - 1090-9516
IS - 3
ER -