Implications of internationalization on export assistance in the eastern hardwood lumber industry

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Virginia Polytechnic Institute and State University


A questionnaire was sent to 1,149 small eastern hardwood lumber firms to determine export assistance needs. Data from 354 producers and distributors were analyzed using the concept of internationalization. Internationalization is the gradual process by which firms increase involvement in foreign markets. While the process is gradual, distinct stages can be identified by involvement in and commitment to international markets. Firms were placed into one of five distinct stages of international involvement based on their desire to export, method of export, and percentage of total lumber sales from hardwood lumber exports.

Firms in each stage were compared based on demographic characteristics. Firms in the latter stages had larger internal marketing/management staffs, larger production staffs, greater average annual hardwood lumber output, and higher average annual lumber I sales. Characteristics that differentiate firms from each other suggest different export initiation and export assistance needs.

Firms in each-stage were compared based on awareness, use, potential use, and perceived benefit of twenty-two export promotion programs. Awareness and use of the programs was found to be low. Firms existing in the various. stages of international involvement desired different export-related information and assistance. The large proportions of firms indicating potential use and perceiving benefit from the programs suggests that barriers exist which prevent their use.

Many firms are either unaware of export opportunities or perceive barriers and risks that inhibit their entry into exporting. Companies were compared based on perceived barriers to exporting and the importance of twenty-one export stimuli. Domestic oriented firms perceived themselves as too small to export and were satisfied with the domestic market. Potential exporters indicated that their lack of knowledge about foreign markets kept them from exporting. The potential for increased profits and communication with export distributors were ranked as the most important export incentives, while the chance to travel overseas and communications with chambers of commerce were ranked as the least important.