The Examination Model of Aceh Commodity Export Firms’ Performance

Syaifuddin Yana (Department of Management, Economic Faculty, Syiah Kuala University, Banda Aceh, Indonesia)
A. Rahman Lubis (Department of Management, Economic Faculty, Syiah Kuala University, Banda Aceh, Indonesia)
Faisal (Department of Management, Economic Faculty, Syiah Kuala University, Banda Aceh, Indonesia)
Hizir Sofyan (Statistic Department, Syiah Kuala University, Banda Aceh, Indonesia)

Proceedings of MICoMS 2017

eISBN: 978-1-78756-793-1

ISSN: 2516-2853

Publication date: 4 May 2018


Purpose – This paper is intended to test for the model of commodities export performance (EP) in Aceh Province, Indonesia.

Design/Methodology/Approach – This research will focus on approach model of firms competency variable, customer relation, foreign environmental factor, and moderating variable of export competitive strategy which aims to improve firm performance in the export context.

Findings – The research framework models will give a new perspective to export activities conducted by exporting commodities in an emergent nation such as Indonesia and more specifically in Aceh.

Originality/Value – The improvement of EP.



Yana, S., Rahman Lubis, A., Faisal, and Sofyan, H. (2018), "The Examination Model of Aceh Commodity Export Firms’ Performance", Proceedings of MICoMS 2017 (Emerald Reach Proceedings Series, Vol. 1), Emerald Publishing Limited, Bingley, pp. 165-174.



Emerald Publishing Limited

Copyright © 2018, Syaifuddin Yana, A. Rahman Lubis, Hizir Sofyan, Faisal.


Published in the Emerald Reach Proceedings Series. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at The full terms of this licence may be seen at

1. Introduction

Exports play a very important role in contributing potential revenue to the country. Increased exports may have impact which is straight or indirect in increasing the domestic production, economic growth, declining unemployment rates, and generating foreign exchange rates to comply the requisite of import costs. The proficiency of the state to compete successfully in world markets, maintaining a trade balance that provides benefits and controlling external payment situations, reflects the economic strength and marginal competence of other nations. Therefore, export activities and the proficiency to export are required by a country in order success in international trade, where the export performances (EP) needed approaches in broad perspective concept in the form of quantitative and qualitative variables (Sousa, 2004).

In developing countries, the focus is very much on the company’s EP, as the balance of work and trade is a substantial factor to be considered by policymakers. Consequently, much research on the company’s EP is considered an important factor explaining the growth of international commerce (Husted and Melvin, 2007).

There is a belief among economists that natural resources are meaningful blessing where countries with rich natural resources have more advantages compared to countries with a few or without natural resources. Natural resources have assisted many nations to grow and develop their country, where the country then develops and provides the basis for developing-related technologies and capital goods industries (Ding and Field, 2004).

The global economy continues to strengthen gradually driven by the ongoing recovery in high-income countries, particularly in the US and Europe. This recovery has a positive impact on emerging market economies including Indonesia, as this means in general increasing the potential for the (World Bank’s Trade Flow, 2014). However, the development of various commodity prices, which in aggregate contribute two-thirds of Indonesia’s exports of goods, remained weak, while the pressure of price decline is likely to continue due to supply-side factors and conditions of growth adjustment (re-balancing) experienced by China against credit-driven investment.

Indonesia is a supplier country in the world market. No less than 140 countries are the export destination of Indonesia. From the released of statistical data by the Government Central Bureau of Statistics (BPS), almost 5,000 kinds of products, from Indonesia, enter the markets of these countries. Indonesia’s exports in the period 2008–2012 fluctuated; in 2008, the value of Indonesia’s exports to almost 250 countries valued at US $107.89 billion. However, in 2009, decreased by 10.67% to US $97.49 billion. A year later, it rose 24.86% to US $129.74 billion. And, in 2011, again rose 6.17% to US $162.02 billion, but in 2012, fell 5.54% to US $153.04 billion. Of the many export destinations in Indonesia, there is also an increase in the period 2008–2012, including exports to the Philippines, Cambodia, Kenya, Haiti, Senegal, Gambia, Albania, Laos, and Nauru.

Although in 2014 Indonesia is faced with the political condition, it is being warmed up due to the presidential election. These conditions generally affect the growth of indicators. However, the exports of commodity and services may increase by 2015 by 6.5%. A decrease in 2014 of 0.3% occurs under the conditions of the election. As the above description, it shows that export activity is still showing its impact and estimated to continue to go up in the following years.

As much as countries whose purchases of Indonesian products are always high. Here are 10 main export destinations in Indonesia, China with a 13.63% market share, Japan (11.26%), USA (9.53%), India (8.13%), Singapore (6.89%), Malaysia (5.53%), Korea (4.37%), Thailand (3.59%), Netherlands (3.00%)n and Philippines (2.41%) (Warta Ekspor Kementerian Perdagangan Republik Indonesia, 2013).

Similarly, the condition of foreign trade in Aceh fluctuated ranging from 1997 to 2015, which shows a significant slope caused by several things, such as Aceh hit by conflict in a long time. The following description of Aceh province exports from 1997 to 2015 is given in Table 1, that illustrated the volume and revenue during thus ranges of the years.

Table 1.

Volume and Value of Exports in Aceh Province Period 1997–2015

Year Export (Volume/kg) Export (USD)
1997 15,744,065,076 2,654,301,240
1998 14,911,681,585 2,059,087,160
1999 12,987,076,537 1,780,912,864
2000 8,519,408,829 1,806,083,419
2001 3,405,879,409 666,738,727
2002 8,401,425,696 1,571,114,161
2003 7,483,440,452 1,704,621,446
2004 6,124,958,338 1,812,364,338
2005 5,307,764,303 2,072,415,260
2006 4,224,074,908 2,032,790,547
2007 3,573,192,907 1,854,234,711
2008 3,386,382,500 2,234,130,664
2009 2,742,507,597 1,138,018,858
2010 2,390,754,875 1,359,251,711
2011 2,240,752,691 1,483,590,754
2012 1,725,188,588 1,257,398,628
2013 1,486,982,850 962,969,640
2014 715,003,350 507,414,478
2015 1,182,177,854 93,336,621

Source: BPS of Aceh Province 2016 (processed). In Table 1, from 1997 to 2015 or about 19 years of international trading activity, there was a significant declining of slope in the export volume of 9.45%.

In Table 1, from 1997 to 2015 or about 19 years of international trading activity, there was a significant slope in the export volume of 9.45%, and so did the decline in sales revenue in the dollar decreased by 36.3%. Prior to 2004, Aceh was in prolonged conflict and security problems that persisted during that period. In general, the slope in sales volume is followed by a decrease in export earnings caused by the global recession that resulted in a weakening in the international trading sector. The global recession of 1997 and the last year of 2008 has had influenced in general Indonesia and particularly Aceh Region EP as well.

2. Literature review

2.1. Firm competency

In the discussion of corporate competence, both with regard to international competence and the whole business competence (e.g., strong market position, strong human resources, and strong functional capability) seem to be an important impact to EP. This finding is aligned with the study by Aaby and Slater (1989). However, in the research, it still needs to consider other supporting research that explains the competence of the company in regard to support the improvement of EP.

A literature coverage of the export market indicates that the competence of production, information, marketing, and sales is important in regard to the competence of export companies. According to Morgan (2004), these capabilities can be determined through their role in the process of providing value to customers in line of production of commodity such as value, construction, and delivery.

Some approaches to the theory of corporate competency are tightly linked to resource-based view theory, where firms are appear as a specific set of resources and competencies (LaPatterson, 2005). Therefore, specific EP greatly determines the position of additional proficiency of the firm in finding, creating, and delivering value to customers in the international trading market.

Experience is seen to affect to EP variable as it gives more companies in terms of the perspective of management, international trading and transactions, business partnerships, and others (Majocchi et al., 2005). In the wine industry in France, experience may have a positive effect to the EP.

The firm develops organizational capabilities that enable long-term corporate survival and attracts corporate organizational structures through the framework of those capabilities (Zehir et al., 2012). In today’s highly competitive business environment, innovation capability in organizational capability is critical to achieving sustainable competitive advantage. Intense competition and rapidly changing market structure through the framework of user demand and expectations require the company to develop those capabilities that assist to the company’s performance with way that will be repose on market dynamics.

Dynamic management and organizational capabilities that effectively coordinate and divert inside and outer resources to environmental change are needed to support international expansion (Damanpour and Aravind, 2011). Picking up organizational innovation leads to changes in administrative strategies, structures, and procedures that improve, inter-alia, organizational climate, communications, collaboration, information sharing, personnel policies, coordination, and cooperation mechanisms that can all improve the company’s performance.

2.2. Customer relationship

Customer-oriented companies increase satisfaction with customers' capability to pay through communications (Phan et al., 2005). Communication involves sharing useful information for others and can include information about the customer’s financial capacity. This sort of information provides an opportunity lead to higher customer repayment capabilities.

As a consequence of this, high levels of information sharing can be presumed as a safeguard mechanism because it contributes to better decisions (Phan et al., 2005). Communication can also affect the capability of customer payments through behavioral commitment. Frequently sharing information strengthens relationships between importers and exporters, which prepares ways to assist customers when requested.

Thus, they represent a major differentiator for banking institutions to maintain and achieve competitive advantage (Vorhies et al., 2009). Companies with higher levels of marketing ability are in a preferable position to identify and reply to existing and pent-up customer needs and build long-term customer relationships.

The longer the business relationship, the better the perceived performance. Firm size reveals its capability to absorb marketing costs and reach economies of scale (Agarwal and Ramaswami, 1992). Firms with larger resources are in a preferable bargaining position, which makes them poised to achieve higher levels of performance.

For exporting firm, volatility is the biggest concern coming from the environment, which means it is very hard to anticipate changes in overseas markets (Gaur et al., 2011). However, as exporters maintain relationships with their overseas distributors which are based on co-operation, information exchange, and flexibility, this relationship minimizes the consequence of export volatility in overseas markets (Bello et al., 2003).

2.3. Foreign environment factor

Based on the approach derived from the contingent approach, there is a presumption that the external environment plays a key role in export activities (Navarro et al., 2014), in influencing the relations of foreign-exported distributors.

From the perspective of international experience, it allows exporters to reduce the uncertainty associated with the environment in overseas markets, and also to know properly the mechanism of this market work (Navarro et al., 2014).

The foreign market environment is very influential in the company to be able to enter, act, and interact to the market (Rasheed, 2005). In some cases, due to the difficulties in measurement, most of the work on exports has ignored environmental factors, although recent research have indicate significant influence on organizational influence on strategic decisions and EP (Kaleka and Berthon, 2006).

The foreign market environment affects how companies can enter, engage, and act on it (Rasheed, 2005). Due to the difficulty of measurement, most export activities have neglected environmental influences, although a recent study has indicated significant influence on organizational influence and subsequently on strategic decisions and EP (Kaleka and Berthon, 2006).

Therefore, in the activities of export, ingenuity, and precision in doing business research is a kind of new terms whose usage varies according to the study domain. Studies of ingenuity in general can be grouped into two perspectives. One perspective is that ingenuity is an externally focused generic capability that allows the company to adjust its operations quickly to cope with volatile market conditions and sudden changes in customer needs (Braunscheidel and Suresh, 2009).

The cornerstone of contingency theory is that forces in the external environment affect corporate actions (Boso et. al., 2013). Past study has presented that the conditions under which firms work play a definitive role in building corporate strategy (Cadogan et al., 2003). Marketing knowledge often divides the corporate environment into three topics: competitors, customers, and technology (Germann et al., 2013). This study adds to the intensity of competition because research indicate that the actions of competitors are a necessary element of environmental uncertainty.

Ingenuity in an organization could be extensively defined as the capability of an organization to develop in an ever-changing and unpredictable external environment (Yusuf et al., 2004). Flexibility, besides, refers to a company’s internal capability that enable it to respond immediately and adapt its supply chain in terms of speed, purpose, and volume (Prater et al., 2001).

2.4. Competitive strategies

Previous research found that trust positively affects the competitiveness of exporters in overseas markets, through lower transaction costs, increasing investment in certain related assets, and sharing superior information routine. Several previous studies have found that trust has a positive consequence on performance (Zhang et al., 2003).

There are many companies currently allocating and devoting more attention and resources to export their products to overseas markets (Navarro et al., 2009).

The success of a company operating in a particular business environment is heavily dependent on the organization’s strategic orientation, and its success is tightly related to the level of market orientation (Navarro et. al., 2011). In the relation to export-related activities, many researchers presume that export market orientation (EMO) plays a significant role in export activity because EMO controls the organization’s strategic behavior, achieving competitive advantage which is sustainable in overseas markets, and EP as well (Cadogan et al., 2009).

The approach to competitive advantage is closely related to the positional advantage that the firm has in the market section in which it operates. This advantage is certainly based on the delivery by the customer on the superior value or lower cost achievement compared to the company’s competitors, (Hooley and Greenley, 2005). The advantage of firm position in terms of cost, promotion, and sales is a determining factor that can improve the performance of the company (Hill, 1988). The company’s positioning advantage is the result of a competitive strategy to be a low-cost manufacturer in the industry or differentiate its product/service line.

The rapid development of research supports the adoption of alternative strategic orientations, including innovation orientation, technological orientation, entrepreneurship orientation, productivity, and quality orientation (Zhou et al., 2005).

Institutions are the extent to which the ownership rights of private ownership and freedom of agreement are recognized or defined by applicable regulations (Acemoglu and Johnson, 2005). To point out, in the Chinese context, companies from ETE still face many institutional barriers (for example, fairness competition, access to finance, laws and regulations, tax burdens, and support systems) which can hamper the company’s business that can be pursue a competitive strategy in overseas market (Zhu et al., 2012).

The process that is making strategic-making by the firm is an important theme in the international business strategy and research (Papadakis and Barwise, 2002). This is in line with context decentralization of hierarchical, political behavior, and lateral communication is an important dimension in the process of decision making in international companies (Dimitratos et al., 2011).

Changing the company’s strategy can improve competitive strategies which is centered on new companies and reduce the capability of firms that are obliged to operate from traditional relational strategies (Peng, 2003). There is a clear extension of research on other Asian countries with specific populations. Other potential research by Peng (2003) and Dana (2007), illustrated the level and organization of ethnic Chinese population in Asian countries. Where these ethnic minorities are small populations of Asian countries outside China, but generally dominate the private sector (Dana, 2007).

2.5. Export performance

Contributing in the form of theoretical findings gives direction for new research (Griffith and Zhao, 2015). First, the relation takes into consideration that the mechanisms governing relations and relational norms between foreign distributors and exporters are perceived as direct drivers of EP. Second, in accordance with the channel-related theory, this study conditions relational norm through the level of exporter dependency on foreign distributors and international capabilities of exporters (Bello et al., 2003). Third, the contingency-related approach, there is a presumption that the external environment plays an important role in export activities (Navarro-García et al., 2014), in influencing the relations of foreign-exported distributors.

The work to conduct an appraisal of EP is considered a complex task, and the extent to which valuation is particularly useful will depend solely on the credibility of the action (Lages, 2000). Specified steps such as growth, volume, strategies, and competitive positions are presented to six exporters in a preliminary interview session to gain their perspective on the steps taken. The response is that the actions taken are considered irrelevant, especially because of the small size of the company. Therefore, EP is assessed based on three steps, which is determined based on the outcome of the interview.

More than four decades, numerous published studies have discussed the determinants of Ep (Chen et al., 2016). The significant contribution to the export activity of gross domestic product (almost 30% in 2015 according to World Bank statistics) and the popularity of exports as an international market entry mode (mainly for small and medium enterprises), which then triggered a lot of research conducted to identify factors Responsible for export success (Leonidou et al., 2002). In the 1990s, researchers conducted more research to investigate the antecedents and performance results of export strategies (Aulakh et al., 2000). Meanwhile, recent research mainly stresses on the key point of resources and capabilities associated with the company’s exports.

3. Research framework

This research will notice for a causal connection between variables that can provide answers to the phenomenon of how benefit the export strategy in exporting companies in Aceh Province and its relation to EP in exporting companies. In this research, we will use an approach of some literatures that have a direct relation to the variables examined in this research are the key factors related to export strategy advantage in exporting firm in Aceh Province and EP at exporting company. Based on the review, in this research, a framework can be propose by this research as Figure 1.

Figure 1. Research Framework

Figure 1.

Research Framework

4. Conclusion

Globalization and changes in the world market environment have an influence on the changing international trade market. Therefore, exporting companies are required to adjust to such rapid changes. Research framework models offered will give a recent dimension to export activities conducted by exporting commodities in developing countries like Indonesia and more specifically in Aceh which is one of the greatest export commodity and extremely prosecutes exports in order to develop aspects of the company’s competency in exports, improve, and develop relations both with export destinations, anticipate and studying the dynamic foreign environment, and, most importantly, how exporting companies could attain competitive advantage over other international exporting competitors that have the capability and competitive advantage relative to other competitors, thereby achieving the final achievement of this model is the improvement of EP of the whole exporter.


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All papers within this proceedings volume have been peer reviewed by the scientific committee of the Malikussaleh International Conference on Multidisciplinary Studies (MICoMS 2017).

Corresponding author

Syaifuddin Yana can be contacted at
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Recurrence of Intravenous Leiomyomatosis: A Rare Cause of the Obstruction of the Right Heart
Single Mother Role in The Success of Their Children (Phenomenological Study of Single Women in Makassar City)
Optimal Lot-Sizing Algorithms on Stochastic Demand at the Retailer
Predict Environmental Conditions Using Groundwater Interpretation in Subdistrict Hamparan Perak, Deli Serdang, North Sumatera
Public Discovery of the Concept of Time Value ofMoney with Economic Value of Time
Study on Impact Strength Against Welding Smaw on Hardening Steel AISI 1050
What is the Determinant of Non-Performing Financing in Branch Sharia Regional Bank in Indonesia
Spatial Stochastic Modeling of Adolescent and Under-Five Children Nutritional Status: A Case Study from Aceh, Sumatera Island, Indonesia
Religious Tourism: Concept of Community-Based TourisminAceh Singkil, Indonesia
The Contribution of Revenue and Consumption Cost of Soybean Farmers in Muara Batu Subdistrict Aceh Utara
The Composition of Women Parliament Members Presence in Local Parliament in Aceh (A Case Study at Provincial Parliament of Aceh Province During the Period of 2014 to 2019)
Personal Branding Tri Rismaharini the Provision in Media
Analysis of Factors Affecting the Poverty Level of Farmers Post-Tsunami in Aceh
Dimension of an Islamic Model Value on the Existence of Syariah Walmart
Batik Jambi Promotion Based on Social Media in Asean Economics Community
Islamic Banks in Indonesia: Analysis of Efficiency
Design of Information Monitoring System Flood Based Internet of Things (IoT)
Economic Development and Access to Fish Resources: A Review Sociology on Fisherman’s Production Access in Kuala Langsa, Aceh
Dynamics and Prospect of Wali Nanggroe Institution Post-Conflict in Aceh: Analysis of Policy and Educational Development
Learning Management of Bahasa in Senior High Schools
The Difference in the Antimicrobial effect of Katuk Leaf Extract (Sauropus Androgynus (l.) Merr.) Concentration against Escherichia Coli
City Branding of Denpasar City as a Creative City Through the Denpasar Festival Event
Semantics Equivalence of Cultural Terms of Meurukon Texts Translated from Acehnese into Indonesian
Preparation of Activated Carbon From Banana (Musa acuminate L.) peels for Carbon Monoxide Adsorption
Thermal Behavior of Modified Thermoplastic Starch (TPS) Synthesized from Sago (Metroxylon Sagu) with Diphenylmethane Diisocyanate and Castor Oil
Typhoid Fever Profiles at Cut Meutia Hospital, North Aceh, Indonesia, in 2016-2017
Student Radicalism Ideology Prevention Strategy: A Study at an Islamic Boarding School in Jabal Nur, North Aceh, Indonesia
Implementation of Task-Based Learning for Non-English Students: A Practice in Malikussaleh University
Design of Wild Animal Detection and Rescue System with Passive Infrared and Ultrasonic Sensor based Microcontroller
Policy of Educational Budget Aceh Regency
Foreign Direct Investment Inflow into Aceh province of Indonesia After a Peace Agreement
Design of Web Based Fire Warning System Using Ethernet Wiznet W5500
Sari Cincau Ngrayun Equals with Modern Ready-to-Drink Beverage
The Status of Conservation of Mangroves in the Krueng Reuleng River Area, Leupung, Aceh Besar Regency, Indonesia
Analysis of Understanding the Level of Vibration and the Wave Concept with a Demonstration Method for Students in SMAN 1 Peureulak, Aceh
Screening of Volatile Organic Compounds Using Gore-Sorber Method for Predicting Hydrocarbon Generation
Incorporating Peace Education into Aqidah Akhlak Subject in East Aceh
Learning Motivation of Peripheral University Students and its Relation with their English Grades
Thermal Cracking of Low Temperature Conversion on Low Density Polyethylene Plastic Waste for Liquid Hydrocarbon
Correlation of Lead and Zinc Contents in Sediments And Faunus Ater Against Faunus Ater Density in Reuleung River, Leupung, Aceh Besar
The Correlation between Stress Level and Degree of Depression in the Elderly at a Nursing Home in Lhokseumawe in the Year 2017
Effect of Palm Oil Bunches Microfiller on LDPE-recycled Composite Tensile Strength through Melt Blending Process
CSR and Profitability in IDX Agricultural Subsectors
The Crown Witness and the Protection of Human Rights in Criminal Law Verification
Design and Implementation of SCADA Wireless Communication System for Monitoring the Performance of Microhydro Power Plant Based on Protocol AX.25
Production of Lipid Biomass in Locally Isolated Microalga Cultivated in Palm Oil Mill Effluent (POME)
An Analysis and Design of a Virtual Collaboration Information System of the Jamu Supply Chain Network Based on a Fair Adaptive Contract
Adsorption of Manganese (II) Ion in the Water Phase by Citric Acid Activated Carbon of Rice Husk
Eco-informatics: The Encouragement of Ecological Data Management
Challenges in Designing ESP Course for First Year Students of Engineering Faculty at Malikussaleh University
Isotherm and Kinetics of Cd(II) Adsorption by Durian (Durio zibethinus) seed Immobilized into Ca-alginate
Science, Technology, Engineering, and Mathematics (STEM) Learning on Student’s Science Process Skills and Science Attitudes
Effect of Perception of Facilities, Intensity of Conduct, and Satisfaction of Tax Payers to Submission of Letter by E-Filing Notice on Tax Service
Aceh: Conflict Development after the Helsinki Agreement
The Discretionary Accrual in the Financial Statement of a Public Company in Indonesia: A Literature Review
Inventory and Morphological Characterization of Durian (Durio Zibethinus) in Langkahan and Sawang Sub-District of North Aceh Indonesia
Model of Sustainable Electrical Power Management: Lamp Efficacy of the National Street Lighting in North Sumatera Province
Hamming Index for Some Classes of Graphs with Respect to Edge-Vertex Incidence Matrix
Electrical Automation of Solar Cell-Based Arduino Uno With 16 × LCD Display
Concept Designs of Patient Information Security Using e-Health Sensor Shield Platform on Blockchain Infrastructure