Determinants of firm export performance in Uganda

Abstract

Firm export performance (FEP) has been a subject of research since 1960s. This is because favourable firm performance as a business activity is important not only to the export company but also the national economy. At firm level, good performance brings about company growth through profit re-investment and development of company’s facilities and resources. At industry and national economy level, it results in innovation and quality development, government revenue through taxes, employment, and infrastructural developments among others. All these consequently improve livelihood, standard of living of the citizen and economic development in a country. For these reasons, practitioners and academics remain interested in issues of acceptable level of FEP. Practitioners strive to achieve firm export objectives especially objectives of profitability and growth; and academics want to explain the factors and other issues underlying FEP. The available literature indicates that it is not clear what determines acceptable level of FEP. The literature further indicates that knowledge on FEP is fragmented, contradictory, and full of controversies, lacking consensus and the theory on FEP is still at infancy stage of development. Export corporations are reportedly facing challenges in operationalising their export objectives, leading to continued poor performance. Therefore the objective of this study is to examine the literature to identify the determinants of FEP in the context of Uganda, and then to propose a model to gain insight into the dynamics in order to generate new understanding and explanation of FEP. Examination of literature identified export market orientation, export market environment, and organisational learning as independent variables. In addition, export market information system, export market strategy, and organisational innovations capability were also identified as mediators. Quantitative cross-sectional survey was conducted. Self-administered questionnaires were used to collect data from 250 firms in some industries in the export sector. Psychometric analyses covering reliability, exploratory, confirmatory, and validities analyses were performed. Finally, structural equation modelling was used to validate and analyse the hypothesised relationships in the study. The results indicate that the independent variables indirectly relate to FEP. This implies that an export development or promotion corporation needs to invest in implementation and practice of these variables. The key variable that have been empirically identified as determining FEP include export market orientation, export market environment and organisational learning as independent variables; and export market information system, export market strategy and organisational innovations capability as mediating variables. Appropriate implementation and practice of these variables would create competitive edge hence in export firms, hence, improving FEP. This would consequently enable the firms to realise their export objectives, and other economic benefits due to good export performance. In conclusion, from the perspective of Uganda, good FEP is determined by export market orientation, export market environment and organisational learning. These determinants yield better influence through export market information system, export market strategy and organisational innovations capability as mediators.