The Role of Firm’s Location, Export-Related Resources and Capabilities in Relation to Coffee & Sesame Export Performance in Ethiopia

Abstract

Exporting has been one of the fastest foreign expansion strategies in the last two decades. The purpose of this study is to investigate the role of an exporter's location in the development of export-related resources and capabilities, which will have an impact on the degree of export performance. The relationship between export-related resources, capabilities, and export performance are examined in this study. A total of 300 questionnaires were sent out to coffee and sesame exporters. However, only 253 surveys were used for analysis. The SmartPLS 3 software was used to analyse the data using the Partial Least Squares (PLS) technique. The study's findings suggest that access to location-specific resources and skills are critical antecedents for a company's ability to build export-related resources and capabilities in order to improve export performance. The geographic location of a company has a considerable and beneficial impact on human resource capability (β =0.67, p=0.001). Information capability was not significantly influenced by human resource capability ((β =0.082, P=0.259). Information capability ((β =0.656, p=0.001) is significantly influenced by organizational planning capability ((β =0.452, p=0.001). Satisfaction Export Performance ((β =0.431, p=0.01) has been significantly and positively influenced by information capability. New Product Development Capability influences strategic export performance significantly and positively ((β =0.330, p=0.001). Strategic export performance ((β =-0.035, P= 0.820) and satisfaction with export performance ((β =0.050, P= 0.625) were not affected by relationship capability. These data suggest that when it comes to exporting, rural businesses face significantly greater obstacles than those in metropolitan areas. The outcomes of this study will assist managers of remote-area businesses in developing equally appealing recruitment and reward practices in order to compete with businesses in urban areas. Furthermore, the outcomes of this study advise that export firm managers think carefully about the resources and capabilities required to improve their export performance.