Dr Edith Ipsmiller will give a presentation during the IBS research seminar series on 14th November

Dr Edith Ipsmiller of Vienna University is giving a seminar presentation during the International Business and Strategy lunchtime seminar series on 14th November, at 13.00-14.30 in room 108, Henley Business School.

Presentation title:

SMEs’ Export Channel Choice: Predictions from Real Options Theory

Abstract:

For the most part, SMEs use exporting as a means to expand sales and create value. Past research examining the export channel choice decision focuses on selecting the most efficient, transaction cost-based channel. Yet, transaction cost-based decisions have been criticized for being static, neglecting future dynamic evolutions in export channels. In this study, we add real options theory to a transaction cost model of export channel choice in order to provide a more dynamic, value generation-oriented view of export channel decisions. Based on data gathered from a sample of Austrian SMEs, we find that demand uncertainty induces SMEs to choose export channels that provide them with the opportunity to reduce downside risk while remaining upside potential, viz. real option-based export channels. Furthermore, our results indicate that under uncertainty, firms having acquired strategic flexibility require less downside risk protection as offered by real option export channels than firms lacking this flexibility and will hence less likely choose real option export channels. Overall, the analysis supports the idea that small and medium-sized firms do not only select export channels based on cost but also value creation aspects.