To read the full version of this content please select one of the options below:

Export market expansion through indirect learning: evidence from Korean exporters

Han-Mo Oh (Department of International Trade, Chonbuk National University, Jeollabuk-do, South Korea)
Dennis B. Arnett (Rawls College of Business, Texas Tech University, Lubbock, Texas, USA)
Sang Bong An (Department of Business Administration, Shingyeong University, Gyeonggi-do, South Korea)

Journal of Korea Trade

ISSN: 1229-828X

Article publication date: 5 December 2016

Abstract

Purpose

A appreciable number of exporters have successfully developed their markets in foreign countries although they have little prior experience in those countries. Advocating that indirect learning plays a crucial role in explaining this phenomenon, the purpose of this paper is attempted to investigate whether and how learning indirectly from competitors and interfirm relationships enables exporters to successful expand their business into foreign markets.

Design/methodology/approach

Drawing on the knowledge-based theory of the firm and the late-mover advantage theory, the authors developed an empirically testable model that explains and predicts the effects of indirect learning on the success of export market expansion. The model was tested using a complied archival data set in regard to exporters’ market expansion events and international accounting. The sampling frame was the events of Korean exporters’ market expansion.

Findings

Empirical evidence shows that exporters’ indirect learning from domestic, local, global competitors and from interfirm relationships influence their success of market expansion. In addition, indirect learning from domestic rivals and from interfirm relationships has a more positive effect on the success of expansion into emerging markets than into developed markets.

Research limitations/implications

Because the authors employed an event-study method, the limitations of this method can be applied to the present research. In addition, because of the empirical context, the results of the research may lack generalizability. The authors, however, provided an understanding how an exporter can succeed in a foreign market specifically when it has lack of direct experience in the market.

Practical implications

The results of the current research suggested that an exporter should try to learn from local, domestic, and global rivals experienced in a foreign market in order to succeed in the market. In addition, exporters should be affiliated with business groups or partnerships because these affiliations can strengthen the information-sharing mechanisms. Moreover, an exporter should focus first on learning from local rivals and then domestic rivals in order to develop proper expansion strategies. Finally, an exporter should attempt to more actively learn from rivals and interfirm relationships when it targets an emerging market than a developed market.

Originality/value

Prior studies have emphasized the effects of a firm’s direct learning on market development success. The authors, however, filled a knowledge gap of the impacts of learning in two aspects. First, the authors provided an understanding of the effects of indirect learning on market expansion success. Second, the authors demonstrated these effects in the context of export.

Keywords

Acknowledgements

The authors thank the participants of the 2015 ANZMAC Conference held at Sidney, Australia for their helpful comments on previous drafts. This paper was supported by research funds of Chonbuk National University in 2014.

Citation

Oh, H.-M., Arnett, D.B. and An, S.B. (2016), "Export market expansion through indirect learning: evidence from Korean exporters", Journal of Korea Trade, Vol. 20 No. 4, pp. 318-331. https://doi.org/10.1108/JKT-12-2016-017

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Korea Trade and Research Association