Do National Export Promotion Programs in Indonesia support export competitiveness?

Abstract

This study examines the influence of export promotion programs (EPPs) in Indonesia on companies' resources, capabilities, strategies, and competitiveness, and whether such programs positively impact export performance and finances. Using data from 204 exporting companies in Indonesia and the structural equation model for analysis, this study finds that participation in EPPs reinforces the organizational resources and exporting capabilities needed for developing successful export strategies. This allows for the creation of competitive advantages in export costs, product superiority, and effective distribution, which in turn increases performance in terms of market share and finance. The results also indicate that the effect of EPPs is relatively more significant on small companies and those with more export experience. They confirm that EPPs have the most significant impact on firms’ resources and capabilities, and that assistance programs that aim to improve organizational capabilities are needed to enhance marketing strategies. While innovative capabilities and business intelligence offer great potential to support export performance, EPP-type assistance programs have not been adequately developed in Indonesia.

1. Introduction

Micro, small, and medium-sized enterprises (MSMEs) contribute significantly to the equitable distribution of economic growth benefits in Indonesia. However, MSMEs' participation in the international economy through exports remains low owing to limited knowledge about foreign markets, skilled labor, capability to design export strategies, and access to financing [1,2]. Governments worldwide have launched initiatives to encourage MSMEs' participation in exports. Studies report export assistance programs in different developed countries such as Belgium [3], the UK [4], and Denmark [5], and in developing countries such as Bangladesh [6,7], Peru [8], and India [9]. The Indonesian government has allocated resources to address these challenges through export promotion programs (EPPs) that provide information, training and education, export mobility, and financing. Although these programs may not directly improve the export performance of MSMEs, they have proven to be catalysts in increasing companies’ resources, capabilities, and export competitiveness [4,8,10].

EPPs are offered through several initiatives that include provision of information related to exports [9], assistance through education and training in export marketing [8], export product development [11], export and import management, and export promotion and communication (see Appendix Table A). Other support provided by the government includes financial assistance such as export credit and credit guarantees [12,13], trade fairs [14], trade missions [15], and business-matching activities to begin relations between domestic companies and overseas partners and consumers. There is evidence that EPPs can enhance and improve organizational resources and capabilities [4,16]. When firms improve their resources and capabilities, marketing strategies may become more effective [17,18], leading to gains in competitiveness [19,20]. As firms become increasingly competitive when facing global rivals, they may achieve superior exports and financial performance [21,22]. Theoretical models at the firm level connecting resources and capabilities with competitive strategies and competitiveness with export performance are well known [21]. However, EPPs can play a role in resources and capabilities as an external factor for the firm, signaling that government assistance can potentially lead to export performance by helping firms improve their resources and capabilities.

This study analyzes the effect of EPPs on MSMEs' export performance in Indonesia with a resource-based view (RBV). In 2020, the number of exporting companies in Indonesia was very low and the contribution of MSMEs to exports was only 14.4% of total exports, which can be attributed to internal and external barriers faced by firms [23,24]. Internal barriers relate to information (i.e., limited knowledge of markets and inability to identify opportunities) [25], functional barriers (e.g., lack of managerial capacities, limited production capacity and narrow financial capacity) [16], and marketing (i.e., lack of competitiveness in products, high prices, limited distribution channels, or deficient promotion activities) [1,23,24]. External barriers often refer to procedural [5,26], governmental (strict foreign rules or regulatory frameworks) [19,27], task [28], and environmental [2,29,30] barriers faced by companies. In such cases, EPPs are expected to maximize MSMEs’ potential in promoting economic growth and equal income distribution through exports by helping firms tackle export barriers and improve internal resources and capabilities.

Several questions have been raised regarding how far EPPs can effectively boost the global competitiveness of domestic companies [5,31], including MSMEs. Governments may not have information on which services support export performance more effectively [32], which companies benefit the most [33], or which aspects of EPPs help companies the most [34,35]. The appropriate identification of effective EPPs and a correct understanding of the process by which firms internalize EPPs can help governments maximize the impact of government assistance. Strategic EPPs can have a positive impact by enabling MSMEs to participate in exports [27]. However, the effectiveness of EPPs in terms of their quality, coverage, quantity, and durability remains unclear.

In some countries, EPPs aimed at driving innovation have a higher success rate in supporting export strategies, competitiveness, and export performance than EPPs with other goals. In Peru [8] and the UK [4] educational programs have not assisted companies in export activities. This means that EPPs should be carefully designed and program delivery constantly improved.

This study analyzes the effects of EPP with different designs on the performance of export activities. Specifically, it analyzes whether EPPs can increase the 1) the resources and export capabilities of MSMEs, 2) capability of MSMEs to develop export marketing strategies, 3) export competitiveness of MSMEs in Indonesia, and 4) export performance of firms.

The impact of export assistance in supporting firms to reach global markets or increase their exports has attracted the attention of scholars, producing a number of studies in the field [32]. However, several aspects of the literature on EPPs show overlap. First, few firm-level studies examining the role of EPPs in export performance provide a solid theoretical rationalization. A number of studies, for example, assume that government assistance directly affects company performance [9,36,37] and neglect to provide insights on how export enterprises actually benefit from such EPPs. Second, a number of studies employing resource-based frameworks generally incorporate limited parameters linking EPPs with export performance [8], and do not capture the instrumental effects connecting them with export performance (e.g., the role of resources, capabilities, strategy, and competitiveness on performance). For instance, Bıçakcıoğlu-Peynirci et al. [38] note that export marketing strategies depict key features in the relationship between firm capabilities, competitiveness, and export performance, aspects that are often missed in the literature on export performance. Third, with some exceptions, studies have rarely tested the simultaneous effects of the relationships among constructs [13,25]. Fourth, EPPs are often aggregated in a single construct, with studies missing evidence of the effects of specific EPPs [6,37,39]. This study seeks to fill these gaps.

The research makes the following four contributions to the literature. First, it theoretically links government export facilitation and companies’ export performance, pointing out that the impact of EPPs on firm performance may not be direct (as often assumed by earlier studies in Indonesia) but through the channels of increasing resources and capabilities, marketing strategies, and competitive advantages in exports. Second, by gathering information on 18 sub-programs, this study incorporates four groups of EPPs to examine the role that specific programs play in improving company resources and capabilities. Third, we examine the instrumental role that specific forms of export assistance can play for specific resources (e.g., managerial, production and R&D, and intellectual) and capabilities (e.g., business opportunities, relationships, and innovation) in individual firms. Fourth, by scrutinizing the mediating role of specific resources and organizational capacities in enhancing export strategies, we investigate whether an export marketing strategy can be an enabling factor in reshaping government assistance programs into competitive advantages for exporters. Policymakers can increase the effectiveness of EPPs and improve the pathways and mechanisms of government assistance by considering the resource and capability factors in target firms.

This study used a survey to obtain data from MSMEs and information on how they utilized and benefited from EPPs [40]. The survey identified the performance, in terms of resources, capabilities, strategies, competitiveness, and export activities, of 204 MSMEs in Indonesia. A structural equation model (SEM) is used to answer the research questions.

2. Literature review

2.1. Impact of EPPs on export performance at the company level

Previous studies have explored EPPs in various countries from the perspectives of providers and recipients. From the provider's perspective, research has focused on program content [41] implementation mechanisms [42], procedures [43,44], communication strategies [45] and evaluation methods [46]. Macro- and firm-level approaches have been used to evaluate EPPs [47,48].

From the perspective of program beneficiaries, previous studies can be grouped into five categories [4]. The first category focuses on awareness, frequency of access, and use of EPPs [45,49]. Other studies differentiated companies based on their status: potential exporters, active exporters, or both [37,50]. Scholars have also focused on designing different programs such as export promotion agencies [15,51], trade fairs [50] coaching programs [44], and export assistance, such as finance, marketing, mobility, and information. Some have dealt with companies’ awareness of EPPs and whether some companies benefit more than others [45,52]. Some others have focused on EPP adjustment based on company characteristics such as company size [37,49] and management [6].

The second category assumes that export assistance impacts companies differently according to the stages of company internationalization [10,53] which are potential exporters, new exporters, established exporters, sporadic traders, or successful exporters. Each stage involves a different level of support. This means that EPPs impact companies differently according to their export experience [37,50,54].

The third category concerns the connection between export support and the barriers and drivers for companies engaging in export activities. Several studies have found that EPPs help increase and complement knowledge of export activities [4,8]. Some have found that EPPs help companies improve their organizational capabilities [16,55] and support the development of global marketing programs and corporate performance [13]. Others have identified the barriers faced by exporters and measured how aid programs can reduce these [56,57].

The fourth category focuses on elevating organizational aspects such as knowledge and relational capital [25,58], managerial aspects and commitment [53], market orientation [6,59], and skills [50,60]. EPPs act as change agents to increase companies’ competitiveness, often leading to a more rigorous, organized, and practical approach for conducting exports.

The fifth category explores the direct impacts of EPPs on company performance [2,61] as well as the indirect impacts [[6], [7], [8]]. Direct impacts include the moderating effects of organizational (firm size) and managerial aspects [25,55] on the influence of EPPs. Indirect effects include how EPPs increase managerial orientation, knowledge, relationships, and commitment, which can inform market strategies and increase competitiveness in global markets. Additionally, EPPs can interact through different channels to influence company performance in financing and market participation.

In Indonesia, the research on EPPs has been limited to five aspects. First, existing research is generally limited to specific EPPs: trade mobility [15], training [62], or generalized assistance (i.e., national or local EPP) [37]. Second, previous studies have not analyzed the relationship between government assistance and internal factors, limiting the understanding of how EPPs influence organizations [2,63]. Third, the models overlook the theoretical assumption that EPP pathways help firms influence their organizational resources, specific capabilities, strategies, and competitiveness. Fourth, the associations among the constructs are often presumed direct and do not offer a sharp examination of the aspects that have an antecedent, intervention, or indirect relationship with EPPs [59,62,64]. Fifth, the model assumes a direct connection between government programs and trade performance [15,37] but overlooks other parameters that could explain phenomena related to government assistance in export facilitation.

2.2. Analytical framework

The model applied in this study is anchored in the resource-based view, in which a company's resources and capabilities are the two factors that support performance. According to the RBV, valuable resources, “rare, imperfectly imitable, and non-substitutable,” are the key to designing and implementing strategies for an effective “competitive advantage” [4]. A resource in an export business is a company-specific stock or asset in the form of inputs available for foreign business activities [65]. Capability refers to a company's ability to foster, combine, and transform resources into value-added goods or services suitable for overseas markets [4]. Most resources and capabilities are available internally but can also be outsourced through government assistance through EPPs.

Government assistance to companies through EPPs can be viewed as an additional resource and capability. In the next stage, increasing a company's resources and capabilities positively affects its capacity to design and apply export marketing strategies. This, in turn, provides a competitive advantage and improves export performance. However, the effect of EPPs on a company's resources and capabilities varies depending on the firm's size and experience in export activities [66], whether it is a regular exporter, intermittent exporter, or early exporter [10,37]. Therefore, firm size and export experience are the control variables in this model.

2.3. Hypothesis development

2.3.1. EPPs and organizational resources for export activities

Foreign markets are vast and dynamic, requiring special marketing knowledge that companies often lack. This knowledge is only accessible through marketing information systems to identify, evaluate, and benefit from foreign market opportunities [8]. However, companies may not have sufficient resources to build, manage, and sustain information systems [67], which puts them in a disadvantageous position as they need information to reduce uncertainty. Companies do not always have access to information on overseas markets to conduct exports. They may not even be able to identify sources of information or the type of information needed to analyze markets or tackle difficulties [63]. EPPs can fill this gap by providing useful information about export activities.

EPPs can also help develop export resources and capabilities through education, training, and counseling programs [44]. Governments often provide export facilitation through trade mobility, such as fairs, international trade missions, and assistance from overseas trade agencies [15]. Other forms of government support through EPPs include financial assistance, such as credit for export-related activities and affordable loans, because conducting export activities often incurs high costs and increases financial pressure [13]. Accessing government networks that facilitate trade mobility and interaction with potential buyers and provide up-to-date information on potential markets and available government assistance, among others, increases organizational resources and, with it, the likeliness of a firm to become an exporter [27]. Based on the above discussion, the first four hypotheses were formulated as follows (Fig. 1).

H1a–H4a

EPPs in the form of information, training, trade mobility, and financial assistance positively affect companies' export resources.

Fig. 1.

Hypothesis and Model Framework. Source: Adapted model from Leonidou et al. (2011). Note: “H” denotes “hypothesis”; H1–H15 are the hypotheses tested in this study. H1 to H4 have two paths; path (a) (organizational resources) and path (b) (organizational capabilities). Firm Size and Export Experience are moderating variables.

2.3.2. EPPs and company capabilities

Export capabilities include market and product development to meet foreign customers' requests, detection of competitors’ movements in the market, and adoption of innovative marketing techniques and tools [19,68]. Firms with stronger organizational capabilities are likely to be more competent in gathering relevant market information, employing such knowledge to improve product innovation, adapting products to customers, and adapting existing export strategies [69]. Capabilities can create value for companies in the form of technical competencies (i.e., product innovation or production processes) and non-technical competencies (i.e., management capabilities and marketing) [38]. By devoting their capabilities to improving, organizing, transforming, and combining resources, firms can turn strategic resources into value for the company [70]. Capabilities are essential for competing in global markets [16].

In addition to strengthening export resources, EPPs can increase export capabilities by providing information, training, and mobility facilitation to companies in finding buyers and distributors, developing negotiating skills, and building relationships with foreign distributors and customers [10]. The government can help firms build innovation capabilities [66], spot business opportunities, and develop deeper and more stable relationships with foreign buyers (i.e., market intelligence, product-service matching, and export planning).

Identifying business opportunities is necessary to improving export capabilities, but companies may not have the resources to conduct international marketing research [3]. The government can provide assistance in trade mobility, overseas trade missions, business matching, overseas promotion [36], and joining international trade fairs [15,71]. Trade mobility programs enable companies to establish direct exchanges with potential foreign buyers, understand foreign customers’ needs, and create products and services accordingly [4]. Moreover, firms can initiate negotiations in person with foreign buyers, exchange knowledge on markets, benefit from experiences in dealing with foreign competitors, develop relations, and compare products and services with what is needed in foreign markets [36,72]. Participating in trade missions and fairs, business matching is a form of experimental learning for firms that may lead to increasing commitment of resources devoted to exports [22] and organizational knowledge gains [36].

In addition, export companies require financial assistance to implement market intelligence, develop new products, finance exports, develop markets [22], and manage foreign market operations more effectively. Access to financial resources can help firms promote innovative products and processes, and commit more resources to exports [26]. Government financial assistance can be provided through money transfers, foreign exchange risk mitigation, and working capital solutions [7,13,46]. Financial assistance can also be directed toward promoting innovation and building technological capacity in firms [66]. Other supports could be subsidies to help firms build brands, increase quality, or raise production capacity for export activities [73]. Assistance in finding financial resources for exports is another form of government support to help firms increase alternative and cheaper sources and flexible terms of financing [22,26]. Thus, the following hypotheses were formulated.

H1b–H4b

EPPs in the form of information, education, trade mobility, and financial assistance positively affect export capabilities.

2.3.3. Organizational resources for exports

Resources are both “tangible and intangible assets” that support a company in developing and applying strategies to expand its business [8,55]. Sufficient resources can strengthen a company's capabilities to seize opportunities and neutralize threats. Competitors cannot perfectly imitate these resources [4,65]. Companies earn greater returns if they can identify, acquire, and use resources to develop effective marketing strategies [49,74,75]. To design and implement unique and effective marketing strategies, companies require resources suitable for export activities [16]. Resources related to human capital [55], finance [12], information [76], production, R&D [77,78], and knowledge [79] are essential for effective export strategies and competition in global markets.

Examples of adequate resources are managers and staff with special expertise in export activities and specialized marketing knowledge of international markets [18,79]. International experience for SMEs can contribute substantially to market strategy and export performance [80], even to a greater degree than innovation capabilities. Other important resources are access to information on foreign markets [22] and working capital to fund exports [81,82]. Bellone et al. [83] point out that better access to financial resources increases the likelihood of a firm entering foreign markets and speeds up the time it takes to start serving the market, thus signaling a more effective entry strategy. Villar et al. [84] find that allocating sufficient resources to organizational innovations and adaptation of management systems for exports would help firms better identify new customers and product segments and carry out more effective global strategies. Resources appear to play a larger role than other aspects (i.e., technological innovations) in supporting long-term competitive strategies [84]. However, the deployment of resources may be the costliest aspect of a marketing plan, suggesting that not all firms own the appropriate resources or can successfully organize them to realize effective marketing strategies [85]. Based on the above, the following hypothesis was formulated.

H5

Adequate organizational resources for exports positively impact export marketing strategies.

2.3.4. Organizational capabilities for exports

Capabilities are the accumulation of abilities, expertise, and skills that enable companies to orchestrate their activities and utilize their assets [72]. Companies must have special capabilities to support their positions in markets that are not easily replaceable [46]. These capabilities must be managed with high commitment and adequate resources, maintained by assigning suitable people to the right positions, and continuously updated by learning from the market [42].

Having sufficient capabilities helps companies successfully implement marketing strategies by identifying, evaluating, and exploiting emerging opportunities in foreign markets [3]. Capabilities also include building good relationships with distributors, customers, and other parties [75], adjusting marketing strategies to the requests of overseas consumers [63], developing original products for buyers [19], and developing innovative techniques and systems to offer higher value to the target market [19,27]. Studies that find positive linkages between export strategy and firm capabilities also point out the need for other capabilities, involving R&D competence [77], learning ability [86], production [22], organizational and technological competencies [16,68,87], and strategic capacity [80]. Based on this discussion, the following hypothesis was formulated.

H6

Adequate organizational capabilities for exports positively affect export marketing strategies.

2.3.5. Export marketing strategies

Export marketing strategies include products, prices, distribution, logistics, and promotions that enable companies to meet customer demands. Such strategies should be coupled with adequate resources and capabilities to realize a sustainable competitive advantage [70,75,88]. Global business settings are becoming increasingly complex, and firms need to build multiple competitive advantages through effective strategy design [18] and implementation [8,49]. Superior resources and capabilities enable a company to identify and sense demand features and respond to them by formulating the right strategy [69]. A correct interpretation of market needs accompanied by strong internal capabilities (i.e., knowledge and innovation) and a well-fitted strategy may lead a firm to achieve cost efficiency and export competitiveness [18].

Competitive advantages in exports often originate from the ability to implement marketing strategies with effective allocation of resources [22]. Companies can gain three competitive advantages: cost, product, and service [4,19,59]. An innovative marketing strategy empowers firms to create original products, offer differentiated goods, and deliver high value to customers through the brand image that is challenging for competitors to emulate [89]. Firms that develop effective and innovative export strategies can deliver unique value to buyers at competitive costs [90]. As Silva et al. [70] point out, firms that constantly seek to adapt and fulfill market needs often enjoy higher competitiveness than their rivals. As firms gain market knowledge and the capability to execute export tasks [22], they find more cost-competitive ways of delivering products [91], designing products that fit customer needs at lower costs [92], and overturning rivals in terms of prices.

Experience and exposure to global markets offer constant insights for firms, allowing them to learn from foreign customers and competitors, resulting in the continuous reshaping and improvement of export marketing strategies [68]. Resources and capabilities [38] can become strategic sources for achieving competitiveness in exports (cost, product, and service) and achieving higher performance in global sales. Thus, the following hypothesis was formulated.

H7

Export marketing strategies positively affect competitive advantage in the form of (a) export costs, (b) products, and (c) services.

2.3.6. Export cost-competitive advantage

A company's consolidated competitive advantage makes it challenging for other firms to compete in similar product markets by duplicating or replacing products or services [65,88]. Leveraging competitive advantage means gaining a competitive edge in the market (e.g., customer loyalty) and good economic performance (e.g., profit growth and return on assets). Such competitive advantage is the value generated by a company's resources and capabilities combined with appropriate strategies [93]. Performance is the value that a company seizes from its profit-making process [6,16].

Maintaining a cost-competitive advantage is challenging in exports because of high entry costs [94] and additional expenses related to developing products for foreign markets [87]. If this milestone is achieved, a company's competitiveness in the export market may increase significantly [31]. Similarly, innovation practices and experience gained in foreign markets provide learning insights for the firm, leading to improvements in productivity and efficiency, and reducing the average cost of production and exports [68,87,90]. Reasonable prices increase customer satisfaction and attract new customers. A low export cost advantage also implies more robust economic performance, facilitating greater price flexibility and superior value delivery to foreign buyers [10,95]. Based on the above, the following hypothesis was proposed.

H8

The cost-competitive advantage in exports positively affects export (a) market performance and (b) financial performance.

2.3.7. Export product competitive advantage

A product's competitive advantage is reflected in its quality, design, and other features that can increase customer approval and trustworthiness in foreign markets [95,96]. Product-based advantages positively affect customers despite the additional costs [52]. Satisfied foreign customers are likely to repeat or increase their purchases and spread constructive communication about the company and its products, helping to attract more buyers [97]. Product differentiation can also help a company ensure market competitiveness or charge superior prices, thereby increasing sales and profit performance [4,47]. In China, exporting firms that maintain innovative processes and constantly improve their products exhibit larger markups in exports and higher productivity (lower costs), signaling better market and financial performance [90]. In Malaysia, exporting firms that enjoy a competitive product advantage show a significant positive impact on financial performance [79]. In addition to a higher perception of value added by customers because of the observable features, products may enjoy price advantages over their rivals', indicating buyers' prospects of deriving additional value from lower-priced products [98]. Therefore, the following hypothesis was proposed.

H9

A product's competitive advantage in exports positively affects export (a) market performance and (b) financial performance.

2.3.8. Export service competitive advantage

Competitive advantage in services relates to the comparative superiority of value propositions based on intangible features developed around a product, which simplifies procurement, distribution, and consumption [98]. Service advantage is analogous to the buyers’ observed service quality, which enhances physical product quality. Differentiation in services includes fast delivery, pre- and post-sales services, technical support, and others [47,99]. Companies that offer better services than their competitors are likely to earn higher customer satisfaction and loyalty [97]. However, meeting customer service requirements in international markets may be more challenging than meeting demands in domestic markets because of geographical, cultural, and economic [3,72]. This leads to companies charging premium prices or increasing their market share, thereby improving their export economic performance [55,95]. In Indonesia, Islam and Márquez-Ramos [100] note, improvements in services increase firm productivity, leading to gains in comparative advantage and superior performance in foreign markets. Therefore, the following hypothesis was formulated.

H10

Competitive service advantage in exports positively affects export (a) market performance and (b) financial performance.

2.3.9. Export market performance

Market performance refers to a firm's capacity to satisfy, maintain, and increase the number of buyers in foreign markets by “offering products, services, and prices” that match their desires [4]. Higher customer satisfaction encourages recurring purchases and appeals to new consumers through a favorable product reputation, thereby increasing firms' deals [67]. A company's profits and overseas market share increase with increased customer loyalty, because premium prices can be applied. By maintaining and expanding its customer base, a business can expand its market and increase its transactions and shares [46].

Previous studies examining the nexus between the market and financial performance generally support a positive linkage, suggesting their coexistence [21]. However, as strategy is associated with the cost of organizational resources devoted to its implementation, it is feasible for firms to achieve good market performance which may not be suitable performance (or vice versa) [6]. Studies find that export marketing strategy has a direct positive association with financial performance, but not a direct significant association with export market performance [85]. Similarly, capabilities–competitiveness can be significantly related to turnover (financial performance) [16] but not to other indicators of market performance.

Earlier studies combined financial and market indicators into single constructs [70,89,101], chose only one category with limited indicators on performance [13,55], or used both constructs separately [6,18,85,102]. We tested financial and market performance separately because exporting firms in Indonesia often perceive higher performance in market aspects than in financial terms [25]. Revindo et al. [37] find that firms with low export intensity experienced trivial improvements in financial performance, but as foreign sales expanded, they began to perceive larger financial gains; the same was observed in India [78]. However, further increases in market performance (i.e., export intensity) would lead to declining financial performance. The link between market and financial performance is not straightforward. In Japan, Lu and Beamish [103] find that firms relatively more active in advertising and technological advancements achieved better market performance and, thus, more substantial financial profits. By contrast, peers in international markets gain financial returns at lower rates. This gives us the following hypothesis.

H11

A favorable “export market performance” leads to greater “export financial performance.”

2.3.10. National EPPs and company size

Government EPPs are accessible to all businesses regardless of size. However, small firms require more EPPs because they have fewer resources and capabilities than large firms [8,13]. For large companies, the inimitable and non-substitutable resources and capabilities are conditions for strategic movements to construct competitive advantages and improve performance [16,48]. Compared to them, small companies have lower management competency and ability to implement overseas marketing tasks successfully [8]. Similarly, MSMEs have limited financial resources, personnel, production input, and partnerships, all essential for sustaining export activities [54]. They often have low market competitiveness because of the absence of economies of scale for both production and product commercialization [57]. Furthermore, MSMEs “risk-taking attitudes” in global commerce have relatively narrower access to and adoption of information [16] compared to large firms.

However, the literature on export performance for MSMEs notes that they can have more efficient innovation practices than large firms [104], notwithstanding the differences in access to resources [89,105]. Prior studies identify that MSMEs can undergo a rapid internationalization process [66], partly because they can internalize knowledge more rapidly, considering their structural organization [104]. Thus, MSMEs are capable of managing the complexity involved in export activities despite resource limitations [106]. Specific resources and capabilities have a more substantial impact on exports in MSMEs than in large firms (e.g., human capital productivity) [77].

Companies can compensate for these limitations in resources and capabilities through outsourcing, that is, by utilizing government foreign trade agencies [79]. Moreover, government EPPs is likely to have a more substantial impact on MSMEs [107] than for large firms. Therefore, the following hypotheses were formulated.

H12

The effect of EPPs in the form of (a) information support, (b) education and training, (c) trade mobility, and (d) financial assistance on organizational export resources is more significant for large companies than for small ones.

H13

The effect of EPPs in the form of (a) information support, (b) education and training, (c) trade mobility, and (d) financial assistance on organizational capabilities is more significant for large companies than for small ones.

2.3.11. National EPPs and export experience

Companies with reduced business expertise have too limited resources and capabilities to develop corporate strategies [8,72]. Inexperienced companies have limited knowledge of their market, competitors, and customers. They often apply ineffective practices to achieve higher efficiency. As such, they take time to cultivate connections with external agents such as suppliers, wholesalers, and consumers, and may lack the vision to deal with a particular problem [108]. By contrast, although experienced companies face different problems in foreign markets, they have more diverse resources and capabilities to overcome market challenges [80]. However, export experience not only represents a source of latest information that encourages companies to improve products, processes, and value market propositions but also provides new insights into the marketing strategy that empowers innovative choices, resulting in marketing advances [68].

Inexperienced companies need more assistance not only in financing export activities but also in understanding international business practices or finding appropriate export staff [31]. Companies that lack global business experience often struggle to obtain adequate overseas representation. Similarly, inexperienced firms have difficulty adapting their export strategies to foreign needs, or lack dynamism in organizing and controlling overseas operations [72]. Lack of export experience increases uncertainty when conducting international business, indicating an urgency to obtain relevant information [109]. Therefore, inexperienced exporters require more government support to improve their resources and capabilities [52]. Thus, the final hypotheses were proposed.

H14

The effect of EPPs in the form of (a) information support, (b) education and training, (c) trade mobility, and (d) financial assistance on organizational export resources are greater for experienced exporters than for inexperienced ones.

H15

The effects of EPPs in the form of (a) information support, (b) education and training, (c) trade mobility, and (d) financial assistance on organizational export capabilities are greater for experienced exporters than for inexperienced ones.

3. Methodology

3.1. Measures

The model applied in this study is based on the RBV, postulating that a company's resources and capabilities are the two most important factors supporting its business performance [65]. In the context of exports, resources are stocks or assets available for international business activities [4]. Capabilities allow companies to develop, combine, and transform resources into valuable goods and services [16]. Resources and capabilities are available internally but may also come from external resources, such as government-initiated EPPs aiming to boost exports and company performance [8,108].

At a more advanced stage, more resources and capabilities positively impact a company's capability to design and implement sound export marketing strategies (H1–H4, Fig. 1). Better export marketing strategies related to product, pricing, distribution, and promotion create strategic advantages (H5 and H6), thus creating a competitive advantage (H7a–c) [4]. Higher competitive advantages positively impact market and financial performance through export activities (H8 and H11) [37].

Methodologically, the EPP constructs are classified into four dimensions (see Appendix A1 for EPP details). The First EPP group is related to information provided by the government to support export activities. The second is related to education and training to increase the export skills and knowledge of the company staff. The third is related to trade mobility, such as the facilitation of trade fairs and missions abroad, and the fourth to financial assistance such as export credit and insurance.

These four EPP dimensions were tested to determine whether they affect organizational resources and capabilities in export activities. Additionally, the effects of EPPs can be moderated by firm size and export experience.

Our model tests whether export marketing strategies are influenced by increased resources and capabilities. These strategies cover three competitiveness dimensions: costs, products, and services. Finally, we examine whether competitiveness in these three dimensions affects export market performance (an increase in export volume or market share) and financial performance (return on investment and return on assets from export activities).

The primary data were obtained from the questionnaires administered to export companies in all regions of Indonesia. The survey identified companies’ use of government EPPs. The measures for the different questions were adapted from previous research, whenever available. These concepts were grounded in the RBV approach. The instrument uses different question formats to minimize response bias. We adopted a 7-point Likert scale following prior studies [4,8,110]—management, marketing, and export literature [111] and the SEM models [112]. Among the various measures used in the strategic export literature, leading ones [4] adapted the 1–7 scale following recommended procedures [113], as well as other studies [6,80,102]. However, other research followed different scales (e.g., 1–5 in Ref. [13] or a four-item scale [66,85]).

The questionnaire comprised eight blocks ranging from general company information to various aspects related to resources, capabilities, marketing strategies, and export performance. Questions on a scale of 1 (strongly disagree) to 7 (strongly agree) were answered based on the company's circumstances over the past three years. The survey components were as follows.

• •Blocks related to EPPs: (1) information, (2) education and training, (3) trade mobility, and (4) financial assistance—Scale 1 = strongly disagree and 7 = strongly agree.
• •Blocks related to organizational resources: (1) managerial, (2) production and R&D, and (3) intellectual—Scale 1 to 7.
• •Blocks related to capabilities: (1) business opportunity, (2) relationship building, and (3) innovation—Scale 1 to 7.
• •Blocks related to export marketing strategy are (1) product, (2) price, (3) distribution, and (4) promotion—Scale 1 to 7.
• •Export competitiveness blocks: (1) costs, (2) products and (3) services—Scale Worse (1) to Better (7).
• •Blocks Related to company performance: (1) overseas market size and (2) financial export performance—Scale Worse (1) to Better (7).

Each component in the blocks accommodates the perceptions of export companies on the matters under study (see details in Table 2). Details of the dataset are presented by Heriqbaldi et al. [40]. Tests were run for 15 hypotheses (Fig. 1) and several sub-hypotheses using SEM. Several statistical procedures were used to ensure model validity.

Table 2.

Validity and reliability test results.

Indicator		Standardized Loadings
1. Utilization of Export Promotion Programs (EPPs) [Strongly Disagree (1) to Strongly Agree (7)]. Source: (Leonidou et al., 2011)
Export Promotion Program in Information (α = 0.808, CR = 0.783, AVE = 0.788)	1. Overseas market opportunity information	0.818	*
	2. Export technical information and requirements	0.808	*
	3. Export publication	0.757	*
	4. Information about specific sectors	0.813	*
	5. About export destination	0.754	*
	6. Limited access to information is an obstacle	0.397a
Export Promotion Program in Education and Training (α = 0.812, CR = 0.808, AVE = 0.678)	1. Export basic training	0.824	*
	2. Export documentation and management training	0.842	*
	3. Export counseling and coaching	0.885	*
	4. Export online training	0.871	*
	5. Export training through e-commerce channels	0.850	*
	6. Limited access, frequency, and variety of training are obstacles	0.857	*
Export Promotion Program for Trade Mobility (α = 0.813, CR = 0.803, AVE = 0.641)	1. Trade show	0.790	*
	2. Participating in trade missions	0.830	*
	3. Taking advantage of outside trade office support	0.772	*
	4. Online digital platforms	0.840	*
	5. Limited access and frequency of mobility activities	0.866	*
	6. Trade show	0.875	*
Export Promotion Program for Financial Aid (α = 0.838, CR = 0.816, AVE = 0.672)	1. Applying for credit for export activities	0.898	*
	2. Applying for an export credit guarantee	0.883	*
	3. Obtaining financial assistance for exports	0.799	*
	4. Limited access to finance is an obstacle	0.600a
2. Export Related Organization Resources Scale [ Strongly Disagree (1) to Strongly Agree (7)]. Source: (Kaleka, 2002; Morgan et al., 2006)
Managerial resources (α = 0.807, CR = 0.772, AVE = 0.620)	1. Interest/commitment to export	0.656	*
	2. Managerial ability	0.772	*
	3. Experience with overseas market	0.770	*
	4. Very positive behavior in supporting exports	0.780	*
	5. Allocation of a sufficient number of personnel for export	0.730	*
	6. Have trained personnel/staff	0.800	*
	7. Limited managerial resources are an obstacle	0.343a
Production and R & D resources (α = 0.805, CR = 0.765, AVE = 0.520)	1. Modern production technology and equipment	0.772	*
	2. Export-only production capacity	0.751	*
	3. Patent/brand/royalty and the like	0.682	*
	4. Technical knowledge for export-only production	0.673	*
	5. Research and development budget	0.723	*
	6. Limited production and R&D resources are an obstacle	0.394a
Intellectual resources (α = 0.817, CR = 0.806, AVE = 0.6277)	1. Knowledge of LN requests	0.855	*
	2. Knowledge of business practices in the destination country	0.871	*
	3. Knowledge of export regulations and documentation	0.877	*
	4. Knowledge of logistics needs	0.890	*
	5. Limited intellectual resources are an obstacle	0.527a
3. Export Related Organizational Capabilities Scale [ Strongly Disagree (1) to Strongly Agree (7)]. Source: (Kaleka, 2002; Morgan et al., 2006)
Ability to Identify Business Opportunities Abroad (α = 0.812, CR = 0.802, AVE = 0.654)	1. Overseas market	0.866	*
	2. Business opportunities	0.854	*
	3. Contacting prospective overseas customers	0.809	*
	4. Looking for important information in foreign markets	0.862	*
	5. Limited capability/ability to identify business opportunities	0.532a
Capability to Build Relationships (α = 0.801, CR = 0.779, AVE = 0.569)	1. Understanding the demands of the customer	0.799	*
	2. Looking for/getting company representatives	0.683	*
	3. Making business ties with partners in LN	0.826	*
	4. Building and maintaining relationships with suppliers	0.772	*
	5. Limited ability to build relationships/relationships abroad is an obstacle	0.489a
Innovation Capability (α = 0.812, CR = 0.794, AVE = 0.596)	1. Able to apply new methods and ideas	0.818	*
	2. Able to develop new/innovative products	0.842	*
	3. Able to apply innovative marketing methods	0.810	*
	4. Able to identify competitor trends/tendencies	0.782	*
	5. Limited innovation capability is an obstacle	0.553a
4. Export Marketing Strategy (Able to fulfill/Offer/Apply) Scale [Strongly Disagree (1) to Strongly Agree (7)]. Source: (Leonidou et al., 2011)
a. Product-Related Marketing Strategy (α = 0.801, CR = 0.787, AVE = 0.564)	1. Product standard/quality	0.773	*
	2. Customer taste	0.825	*
	3. Customer demands (packaging/labeling)	0.810	*
	4. Customer demands (branding)	0.789	*
	5. Customer demands (warranty/after-sales service)	0.783	*
	6. The limitations of product-related marketing strategies are an obstacle	0.523a
b. Price-Related Marketing Strategy (α = 0.800, CR = 0.785, AVE = 0.631)	1. Attractive profit margin for importers	0.814	*
	2. Attractive payment schemes for partners	0.770	*
	3. Attractive terms of sale	0.842	*
	4. Price matching/competitive price	0.758	*
	5. Satisfactory retail price	0.838	*
	6. The limitations of marketing strategies related to price are an obstacle	0.444a
c. Marketing Strategy Related to Distribution (α = 0.813, CR = 0.786, AVE = 0.643)	1. Fast delivery	0.819	*
	2. Inventory replenishment effectively	0.879	*
	3. Sufficient distribution coverage	0.790	*
	4. Managing distributors/agents	0.787	*
	5. Provide fast response to orders	0.791	*
	6. Limited distribution strategy is a constraint	0.393a
d. Promotion-Related Marketing Strategy (α = 0.821, CR = 0.790, AVE = 0.581)	1. Improving promotional activities	0.840	*
	2. Improving community relations	0.837	*
	3. Increasing personal sales	0.825	*
	4. Increasing advertising	0.806	*
	5. Increasing sales instantly	0.825	*
	6. Limited promotion strategy is an obstacle	0.426a
5. Export Competitive Advantage Scale: Worse (1) to Better (7). Source: (Kaleka, 2002; Leonidou et al., 2011)
a. Export Competitive Advantage from Cost Aspect (α = 0.841, CR = 0.838, AVE = 0.711)	1. Raw Material Cost	0.892	*
	2. Unit cost (average cost)	0.888	*
	3. Distribution fee	0.875	*
	4. Cost of sales (sales cost)	0.876	*
b. Export Competitive Advantage from Product Aspect (α = 0.838, CR = 0.833, AVE = 0.680)	1. Product differentiation	0.853	*
	2. New product introduction	0.868	*
	3. Product variety (variation)	0.906	*
	4. Brand awareness/product brand recognition	0.851	*
c. Export Competitive Advantage from the Service Aspect (α = 0.839, CR = 0.831, AVE = 0.630)	1. Product availability	0.892	*
	2. Product delivery reliability	0.859	*
	3. Pre- and after-sales service	0.829	*
	4. Ease of public access to products	0.847	*
6. Export Market Performance (Able to maintain/Improve) Scale: Worse (1) to Better (7). Source: (Griffin & Page, 1993; Leonidou et al., 2011)
Export Market Performance (α = 0.812, CR = 0.806, AVE = 0.730)	1. Value (VALUE)	0.833	*
	2. Customers	0.829	*
	3. New customer	0.813	*
	4. Company/Product Reputation	0.888	*
	5. Partner Satisfaction	0.897	*
	6. Delivering products according to customer wishes	0.808	*
Export Financial Performance (Able to improve) Scale: Very Low (1) and Very High (7). Source: (Griffin & Page, 1993; Leonidou et al., 2011)
Export Financial Performance (α = 0.822, CR = 0.817, AVE = 0.721)	1. Sales volume	0.917	*
	2. Share/niche	0.892	*
	3. Export profitability	0.890	*
	4. Export sales intensity	0.922	*
	5. Return on Investment (ROI)	0.922	*
	6. Return on Assets (ROA)	0.942	*

Note * Valid and Reliable, an item excluded (insufficient loading factor).

3.2. Sampling procedure and data collection

Exporting company directories were collected from various ministries, including the Ministry of Industry, Statistics Indonesia, an extensive database of export banks, and business associations [40]. A total of 2000 firms were identified, with 1155 firms confirmed as exporters, with at least one export activity per year in the last three years. The 1155 firms were validated using a database provided by the Ministry of Planning and Development of Indonesia (combined datasets from different ministries and directories) and Statistics Indonesia. Email and telephone directories were used to establish contacts. Assuming that one-third of the targets would respond (a common rate in Indonesia), the questionnaires were sent to 600 firms randomly selected from the validated sampling framework. The 600 targeted firms ranged across sectors (manufacturing 67% and agriculture 23%), firm sizes (62.7% small, 22.5% medium, and 14.7% large), and locations (84% located in the widespread manufacturing corridor on Java Island), in line with earlier datasets of exporting firms in Indonesia [2]. Considering a 5.5% margin of error and a 90% confidence interval, the survey aimed to obtain at least 188 completed questionnaires from firms, an ideal sample size. The survey carried out by Heriqbaldi et al. [40] retrieved 204 valid responses, equivalent to a response rate of 34%, also in line with previous studies with the number of respondents between 50 and 285 [8,10,111], and earlier studies in Indonesia that targeted 200 respondents to reach a minimum representative sample size of exporting firms [2].

The survey was distributed via email and telephone calls based on information available in public directories. This correspondence was accompanied by an introductory letter issued by the Ministry of Planning and Development in Indonesia, explaining the purpose of the data collection to establish trust and ensure privacy and security. The survey was conducted anonymously. Data were collected from key informants at the senior and export management levels. To minimize bias, the informants were asked the following screening questions: 1) their roles and responsibilities in export activities, 2) whether they were directly involved in the firm's exports, 3) their knowledge of export activities, and 4) their security and authority to answer the instrument questions. An invitation and link to a web-based survey were sent via email or electronic messaging (WhatsApp). The response rate was approximately 10%. A maximum of three follow-ups per respondent was conducted to avoid bias in data collection. A total of 226 respondents completed the questionnaires, of which 21 were eliminated because of incompleteness.

Before launching the survey, policymakers and academics reviewed the questionnaire and tested it on 20 firms. In line with earlier empirical studies in business research [21], we tested for potential non-respondent bias by comparing the responses of the 20 managers in the instrument testing with the full sample. We performed a t-test for two independent samples to compare the groups’ means and tested our experiments using three variables (total labor force, proportion of exports to total production, and current ratio of production to non-production workforce). The results indicated no statistically significant difference between the means.

A second test was performed to remove the possibility of common method bias in our data. We tested one province (East Java) and the rest of the sample (all other provinces) to determine the differences in the means by selecting three different variables: total labor force, proportion of exports to total production, and current ratio of production to the non-production workforce. The t-test procedure for the two independent samples indicated no statistical difference between the means of the groups based on regional location. Thus, we concluded that non-respondent and common method biases were not an issue in our data.

4. Results and discussion

4.1. Sampling and survey questionnaire

The primary data from the general questions were analyzed to determine the respondents’ characteristics [40]. Table 1 presents the descriptive results.

Table 1.

The characteristics of the participating companies.

Number of workers	Number of Companies	Percentage
5-19 People	125	63%
20-99 People	43	22%
>100 People	32	16%
Export Proportion to total production
<10%	71	36%
10%–40%	62	31%
41%–75%	39	20%
>75%–100%	28	14%
Company age since the establishment (years)	Amount
<2	31	16%
3–5	61	31%
6–10	46	23%
11–15	20	10%
16–20	7	4%
>20	35	18%
Export experience (years)	Amount
<2	70	35%
2–5	65	33%
6–10	26	13%
11–15	8	4%
16–20	12	6%
>20	19	10%
The proportion of the production workforce of total workers	Amount
<25%	58	29%
25%–50%	68	34%
51%–75%	41	21%
>75%	33	17%

As discussed in the framework section, the conceptual model was tested analytically. The analysis was divided into three parts: (1) validation of the measurement model, (2) structural model estimation or SEM using SmartPLS software, and (3) assessment of moderating effects.

4.2. Data validation and reliability tests

The correlation analysis is presented in Table A2 in Appendix. A confirmatory analysis (CFA) was performed to assess the measurements. This study used convergent and discriminant validity measures [40]. The former evaluates the loading score factor of each indicator, with the variable considered to meet the value of convergent validity if the score is greater than 0.5. The latter uses the average value variance extracted (AVE), with a variable considered to meet discriminant validity if the value is greater than 0.5.

After meeting the convergent and discriminant validity requirements, we tested the reliability of the research instrument by evaluating composite reliability (CR) scores. The measurement instrument is considered reliable when the CR score was >0.7. The construct reliability was tested using Cronbach's alpha coefficient, CR scores, and AVE.

Table 2 shows that all question items have a correlation value (r) greater than 0.138 (DF = n-2 or 198), with a significance of 0.05, while the alpha coefficient is greater than 0.6. Thus, all question items for each variable are valid and reliable for further testing. The model's goodness of fit of this research model can be seen in Table 3.

Table 3.

The goodness of Fit Indices.

The goodness of fit Indices	Good fit	CFA Model
X2		1327.22
df		809
X2/df	<3	1641
TLI	>0.90	0.818
RMSEA	<0.08	0.077

Table 3 presents the fit statistics, standard coefficients, and t-values used as goodness-of-fit indices. The test results show that the indicator satisfied the model (χ2 = 1327.22) and probability p < 0.01. The CFI was below the maximum limit of 0.91, NNFI was below the maximum limit of 0.90, and RMSEA was 0.077, or below 0.08.

4.3. Structural model estimation and hypotheses testing

The next step was hypothesis testing by examining each path coefficient's significance level (path coefficient). Table 4 presents the results of the hypothesis tests using the structural model in Fig. 1. To ascertain the required ratio of five-to-one observations to the independent parameters, we combined the second-order constructs of resources, capabilities, and export-related strategies to have four, three, and four indicators, respectively, using items from the appropriate first-order factors. Aggregating these items maximizes the degrees of freedom when estimating the path coefficients. Among the hypotheses tested in this study, only four paths were insignificant, while all the other ones were significant and in the expected direction.

Table 4.

Test results of SEM model – full framework.

	Hypothesis			Estimate (β)	SE	P
H1a	EPP related Information	→	Resource	0.422	0.057	***
H2a	EPP related to Education and Training	→	Resource	−0.068	0.031	0.029**
H3a	Mobility-related EPP	→	Resource	0.097	0.039	0.012**
H4a	EPP related to Financial Aid	→	Resource	0.178	0.039	***
H1b	EPP related Information	→	Capability	0.485	0.065	***
H2b	EPP related to Education and Training	→	Capability	−0.151	0.045	***
H3b	Mobility related EPP	→	Capability	0.078	0.028	0.005**
H4b	EPP related to Financial Aid	→	Capability	0.105	0.027	***
H5	Resource Ownership	→	Strategy	0.285	0.083	***
H6	Organizational Capability	→	Strategy	0.58	0.086	***
H7a	Strategy	→	Cost Advantage	0.586	0.118	***
H7b	Strategy	→	Product excellence	0.713	0.095	***
H7c	Strategy	→	Service Advantage	0.832	0.111	***
H8a	Export cost competitive advantage	→	Export market performance	−0.048	0.04	0.236
H8b	Export cost competitive advantage	→	Export financial performance	0.33	0.064	***
H9a	Competitive advantage of export products	→	Export market performance	0.509	0.059	***
H9b	Competitive advantage of export products	→	Export financial performance	0.121	0.044	0.007*
H10a	Service competitive advantage	→	Export market performance	0.054	0.073	0.457
H10b	Service competitive advantage	→	Export financial performance	0.181	0.078	0.02**
H11	Export market performance achievement	→	Export financial performance	0.678	0.112	***

Notes: ***p < 0.001, **p < 0.05, *p < 0.01. Fit Statistics for structural models; p < 0.001; CFI = 0.706 (accepted if below the maximum limit of 0.9); NFI = 0.578 (accepted if below the maximum limit of 0.90); RMSE = 0.07 (accepted if below the maximum limit of 0.08).

EPPs related to information, trade mobility, and financial assistance (H1, H3, and H4) are significantly related to organizational export resources and capabilities. Information programs have a significantly larger coefficient for resources and capabilities than does financial aid. Supporting trade mobility programs and financial access in Indonesia can profoundly impact firms' resources and capabilities, which is consistent with earlier studies in other regions [10,12,14,16,79]. Interestingly, the results related to educational programs (H2) negatively influence export resources and capabilities. This may be owing to, among other reasons, a mismatch between the educational programs provided by the government and the demands from companies. Descriptive statistics show relatively low participation in education and training programs. Internalizing content in training takes time, and applying knowledge to practice may not always be straightforward. Based on the responses to the survey, the training content was theoretical and irrelevant and did not address the companies’ needs. For comparison, Leonidou et al. [4] in the UK, Malca et al. [8] in Peru, and Shamsuddoha et al. [7] in developing countries also found that educational programs and training did not have a significant effect on export resources and capabilities.

Next, the results show that the resources (H5) and capabilities (H6) associated with exports are positively related to the development of export marketing strategies. Intellectual, managerial, production, and R&D resources significantly and positively influence export marketing strategies (product, price, distribution, and promotion). However, the capability of identifying export business opportunities, building relationships, and innovating positively influences export marketing strategies. The findings indicate that organizational resources related to export activities and the capabilities to handle global operations can be reflected in export marketing strategies. Sufficient resources and higher capabilities are likely to result in more effective strategies for penetrating global markets, in line with the literature [4,65,110,114].

The findings support earlier results, in which export-related resources were found to have a significant relationship with export marketing strategies [70,115], and studies indicating a positive relationship between export-related capabilities and export marketing strategies [16,69,70,116]. However, several studies have tested the direct relationship between EPPs and firm performance in Ghana (i.e., trade mobility programs) [14], India [9], Bangladesh [72], and Latin America [26]. We provide additional evidence that EPPs have an indirect relationship with firm performance by improving resources and capabilities related to exports.

Additionally, export marketing strategies have a positive and significant relationship with competitive advantage in terms of export costs (H7a), products (H7b), and service aspects (H7c). This suggests that effective export marketing strategies can help managers remove and overcome barriers, thereby increasing competitiveness. Companies with more accessible information have greater production resources and better managerial systems. Similarly, when companies have increased capabilities to handle exports, they can implement more effective strategies to compete in global markets [98]. By implementing proactive export strategies, companies develop better products for global markets, at more competitive costs, and deliver a higher quality of service to global customers, consistent with earlier studies [4,18,[91], [92], [93],117].

Furthermore, competitive advantages in products (H9a) and export services (H10a) positively influence export market performance. Higher market performance reflects superior competitiveness in exports. This finding suggests that companies can increase their satisfaction by offering higher value, such as products of higher quality and better export services. Thus, they can retain existing customers and attract new ones. Similarly, competitive advantage in export costs, products, and services is significantly related to superior export financial performance, as shown in Hypotheses H8b, H9b, and H10b. Firms may improve global sales, increase market share, raise export profitability, and increase returns on export assets by excelling in cost competitiveness, offering differentiated or innovative products, and providing convenient services. However, this study finds that competitive advantage in export costs (H8a) (cost advantage of raw materials, average cost, distribution, and sales) does not significantly influence market performance. This may be because of the higher costs of product differentiation, which are fundamental to achieving product competitiveness. Differentiation comes with extra adjustment costs owing to cultural, socioeconomic, and other market disparities. Over 66% of respondents stated that limitations in marketing strategies related to prices remained an obstacle to exports.

The positive relationship found between competitive advantage and market performance is in line with earlier studies that showed a significant positive relationship between competitive advantage and export performance in Malaysia [79,118], the UK [4,98], South Korea [93], and Peru [66].

Market performance positively affects export financial performance (H11). Thus, when a company expands its volume and share of exports, it would perform better financially. Exporting companies can positively influence market performance by increasing customer value, retaining customers, acquiring new customers, enhancing their reputation, and delivering products according to customer requirements. When companies deliver higher value to clients, enhance customer satisfaction, maintain their reputation, or attract new consumers, they obtain more positive financial returns, in line with earlier studies that show that market performance is positively related to financial performance [8].

4.4. Managerial implications

Overall, this study emphasizes the importance of government EPPs in enhancing resources and capabilities to allow companies to compete internationally. Therefore, access to government EPPs related to information, trade mobility, and financial assistance needs to be prioritized as it can help companies improve organizational resources (managerial, production, or intellectual capital) and increase their capability in handling global operations. EPP implementation should also be intensified to achieve more significant results. Government assistance programs enable companies to remove trade barriers in Indonesia, such as lack of information, difficulties in finding business opportunities, inadequate human capital, shortage of capital, and the inability to meet international standards [24]. Similarly, improving entrepreneurial orientation [79,114], networking, commitment, and global market orientation [6,86] may intensify the impact of EPPs on exporting firms; prior studies have found these factors have positive moderating effects [16,92].

With EPPs, exporters can focus on improving organizational processes critical to export success, such as researching foreign markets, conducting business intelligence, building relationships, and adapting marketing practices to foreign markets. As a result of increasing organizational resources (managerial, production, and intellectual) and capabilities (the ability to identify business opportunities, build relations with global partners, and innovate), firms may deploy effective export marketing strategies to increase success rates. This finding highlights that firms need to develop organizational resources, boost their export capabilities, increase export knowledge and commitment, and expand their international markets, in line with earlier results [79]. Interestingly, the linking coefficient between capabilities and export marketing strategy is larger than that between resources and strategies, which suggests that increasing capabilities will have a greater impact on market strategies than increasing resources. Governments may focus more on practical programs to build capabilities rather than providing more resources (information, financial aid, or mobility opportunities). Firms advance rapidly in the global market when their resources and capabilities improve.

The findings highlight that export market strategies have a positive and significant relationship with comparative advantage in costs, products, and services, in line with earlier studies in the UK [4], Canada [56], and South Korea [93]. As a result of better strategic design and implementation, firms achieve a more competitive edge in global markets, which is positively linked to higher market and financial performance in the export market. These findings support the view that the more complex, competitive, and volatile the economic environment faced by companies in international markets, the more competitive advantages are needed. Firms can attain better global performance by improving their cost management (efficient access to raw materials, production, distribution, and sales), products (differentiation, variety, branding, and innovation), and services (product availability, delivery, pre-after-sales service, and distribution). These areas of competitiveness also offer insights into developing new EPPs to provide better support for firms to procure and develop products, and provide export services more efficiently.

Earlier studies in Indonesia have found a direct impact of export market strategies on firm performance, though they did not account for the role of competitive advantage in linking market strategies and firm performance [2,75].

4.5. Role of company size and experience as moderation variables

The effect of company size as a moderation variable show that the larger the size, the higher the impact of EPPs (information, education and training, trade mobility, and financial assistance) on the export resources of exporting companies. Likewise, the larger the company size, the higher the positive influence of EPPs on exporting companies’ capabilities. The results of the hypothesis test are presented in Table 5.

Table 5.

Hypothesis testing results of company size and experience.

Hypothesis	Influence					t count	Sig.
H12a	Company Size	→	Application of EPP related to information	→	Organizational resources	2465	0.015*
H12b		→	Application of EPP education and training	→		3467	0.001*
H12c		→	Application of EPP related to mobility	→		3462	0.001*
H12d		→	Application of EPP related to financial assistance	→		3328	0.001*
H13a		→	Application of EPP related to information	→	Organizational capabilities	2400	0.017*
H13b		→	Application of EPP for education and training	→		3188	0.002*
H13c		→	Application of EPP related to mobility	→		3202	0.002*
H13d		→	Application of EPP related to financial assistance	→		3135	0.002*
H14a	Company experience	→	Application of EPP related to information	→	Organizational resources	2402	0.017*
H14b		→	Application of EPP education and training	→		3188	0.002*
H14c		→	Application of EPP related to mobility	→		1425	0.156
H14d		→	Application of EPP related to financial assistance	→		2275	0.024*
H15a		→	Application of EPP related to information	→	Organizational capabilities	1628	0.105
H15b		→	Application of EPP for education and training	→		2863	0.005*
H15c		→	Application of EPP related to mobility	→		1842	0.067
H15d		→	Application of EPP related to financial assistance	→		2482	0.014*

Note: *significant.

Export experience also significantly moderates the impacts of EPPs (information, education and training, and financial assistance) on export resources. The more experienced the company, the greater the positive influence of EPPs (education, training, and financial assistance) on export capabilities. However, it should be underlined that export experience does not significantly moderate the effects of the trade mobility program or export resources on capabilities. These findings suggest that trade mobility programs are more effective for companies with less export experience (new or young exporters) than for experienced companies. An experienced company may already have overseas buyers and access to them. However, this implies that the impact of the trade mobility program has not been optimal in terms of market expansion (extensive margins), although it remains effective in helping companies become global (become exporters). A frequent limitation for Indonesian exporters is the effort required for market development. Trade mobility programs should reconsider the existing programs for experienced exporters to help develop and expand their markets more effectively.

Compared to previous studies in Indonesia, the present findings highlight several issues. While they support previous studies where market strategies (in the context of orientation) significantly influence export marketing performance [59,62,75], the framework in our study covers more aspects related to marketing strategies (i.e., product, price, distribution, and promotion) and competitiveness (i.e., product, price, and service). This detailed framework can explain the different trajectories of the marketing strategies' impact on competitiveness and performance. Our study supports the findings of Fernando et al. [55] and Raharja and Rivani [76], confirming that organizational resources and capabilities positively affect Indonesian companies' export performance. However, they only observed the direct relationship between resources, capabilities, and company performance without considering the paths where companies’ resources and capabilities affect their strategies.

Dhewanto et al. [63] and Revindo et al. [2] analyzed the probability of firms participating in exports from an organizational perspective and characteristics, while others [37,62] have shown that external (government) assistance is an important determinant of export performance. However, some of the models in these studies are fundamentally flawed because of the lack of a theoretical basis for explaining the influence of government assistance on company performance; instead, they assume a direct effect of government assistance on company performance.

4.5.1. Export performance based on company characteristics

Previous studies on organizational resources and capabilities have shown a distinct impact on a firm's competitive advantage [91], innovation [119], and performance [120]. The descriptive data show that some characteristics influence the export performance of Indonesian companies, although these findings need to be tested statistically. Our survey did not collect sufficient information to address this gap. However, future research should consider the following aspects.

• 1.Companies that export branded goods show better (financial) performance than those exporting unbranded goods.
• 2.Companies that engage in partnerships (investment, commercial, design, and finance, among others) show 15% higher performance and 20% higher growth in exports than those without.
• 3.The proportion of companies with a special export unit shows a 15% higher performance (both in terms of profit and volume) than those without. Ownership of special export units can improve sales performance (attract new buyers) and financial performance (increase Returns on Investment, ROI) for companies across sizes.
• 4.Nearly 74% of the exporting companies within industrial areas show a large export expansion rate (volume) compared to 60% outside them.

4.6. Findings and implications

First, training and education programs have the most negligible impact on organizational resources and capabilities. They must be revitalized (content, scope, and approach) and reoriented to improve organizational capabilities. Second, finance-related programs are effective, but access to them is relatively low (only 45% of companies have access to external financing). Third, efforts to increase organizational resources through EPPs have a low impact on strategies. This is partly because the program does not encourage companies to commit more resources or because of their limited capacity to internalize the content of the program. Fourth, innovation capabilities (e.g., business intelligence) have the greatest potential to influence export strategies (in terms of price, production, and distribution), competitiveness, and export performance, but they have not been adequately developed in Indonesia. Fifth, small and medium-sized exporters allocate limited resources to international activities. As more resources are required for export activities, companies become more competitive. Sixth, companies' low strategic performance seems to be related to their lack of capacity to identify important information, analyze data, and follow trends. Therefore, strategic formulation capability needs to be strengthened, as it has the greatest impact on competitiveness (a more influential way to gain competitiveness for medium-large companies). Seventh, the biggest obstacle is companies’ inability to find and contact buyers and distributors.

Based on these inferences, the following implications can be drawn.

• 1.It is necessary for companies to increase their ability to access digital information and resources to support their export activities. Developed countries have demonstrated how their governments have succeeded in providing ecosystems for exporters and well-rounded resources, especially those related to data analysis, technical service exports, and information. Indonesia can use these best practices as a benchmark.
• 2.Programs supporting innovation and market intelligence utilization can substantially impact commerce as they improve the ability to identify business opportunities, find buyers, and develop more suitable products for different markets (strategies).
• 3.Developing an online export education center is necessary to provide easy access to and facilitate content for firms. Hubs should focus on the specific needs of potential exporters. Private-sector participation should be encouraged and accompanied by government support schemes.
• 4.EPPs should encourage companies to increase their commitment to procuring resources to meet competition demands at the international level.
• 5.Market development programs are limited. They can be improved by taking advantage of available resources (e.g., trade agents, trade fairs, the Indonesia Trade Promotion Center [ITPC], and foreign representatives) as they provide exporters with a broad range of assistance.
• 6.As the ITPC has effectively promoted new exporters, the number of ITPC offices needs to be increased to assist exporters and help them access new markets. However, they must be equipped with adequate resources (e.g., IT), diverse programs, and specialized personnel to provide services. To date, these institutions have played an important role in increasing market penetration for Indonesian products but have not done so in market expansion.
• 7.Greater access and varied financial assistance schemes are urgently needed because current access to finance is low. Companies have limited resources to conduct market research, develop or improve products, increase production capacity, finance trade, and invest in marketing. Companies also require knowledge and skills to manage their finances.

5. Conclusion

This study aimed to discover whether EPPs in Indonesia, covering information programs, training and education, facilitation of export mobility, and financial assistance, can support performance in the international market through the intermediation of company resources and capabilities, export strategies, and exporter competitive advantage. The study used an RBV-based model and surveyed 204 exporting companies in Indonesia to obtain information on company characteristics, export barriers, and perceptions of the effectiveness of government programs. It demonstrates that EPPs related to information, trade mobility, and financing support the export of resources and capabilities. However, specific programs related to education and training were found to have a negligible impact on companies’ resources and capabilities. Organizational resources and capabilities positively contribute to the development of export marketing strategies. Managerial, intellectual, and production resources are important for supporting companies in formulating strategies for all aspects of marketing such as price, product, distribution, and promotion. Developing capabilities to identify business opportunities, innovate, and build relationships is crucial for exporting companies when formulating product marketing, pricing, distribution, and promotion strategies.

This study also found that product, price, distribution, and promotional strategies significantly affected all dimensions of competitive advantage (cost, product, and service). Competitive advantages in terms of export costs, products, and services positively influence financial and export market performance. Further, companies that perform better in terms of market share also perform better financially. Firm size and export experience positively affect the effectiveness of EPPs, so more prominent and experienced companies in export markets can benefit more from EPPs. Therefore, companies must be rigorously selected and adequately prepared before joining the programs so that EPPs can optimally contribute to organizational resources and capabilities.

The results point to some recommendations. First, companies need applicable instructions and training that are more technical and can be tested directly in practice. The export mobility program is effective for small exporters, especially startups. However, trade mobility programs (i.e., trade agencies) need to improve their services and functions to support market development (expanding the volume of foreign sales for current exporters). It is imperative to increase the location, frequency, and types of mobility services, and further develop the types of services provided by trade agencies (i.e., market intelligence, legal services, language, and promotion).

Another recommendation is the urgency to increase companies’ financial capacity in terms of both funding access and financial management. Integrating financial services (government, private sector, and cooperatives) can increase the effectiveness of financial programs for exporters. Specific financing policies for market development can help through new product development, new market exploration, and representative appointments in various countries, including conducting market studies and developing sales networks.

This study shows that the effect of EPPs on export performance runs through company resources and capabilities. This finding highlights the importance of internalizing external resources to improve a company's export performance. Government assistance such as EPPs also needs to be internalized by participating companies, necessitating the adoption of good practices to support the internalization process. To improve marketing strategies, companies need to commit to the resources (budget and resources) allocated for export activities, including export management units, budgets for product development, market development efforts, promotion, and expansion, along with other efforts to promote exports so that companies can increase their capacity (size). The more a company grows, the greater its potential to excel in global sales. Industry associations and exporters can be alternative resources for exporters (information, tips, cooperation, networks, etc.) and buffers to expand capacities, complementary in cooperation.

One limitation of this study is that it does not include factors such as firm knowledge, promotion, commitment, or dynamic capabilities [17,86]. Within the context of the RBV, sustainable resources and green capabilities can be considered in future studies, considering the important shift toward sustainable trade [70]. The knowledge factor significantly affects a firm's capability to internalize EPPs to increase competitiveness.

Authors contribution statement

Unggul Heriqbaldi: Conceived and designed the experiments; Edited the paper.

Miguel Angel Esquiviasa: Performed the experiments; Wrote the paper; Resources.

Bhimo Rizky Samudro, Ph. D: Analyzed and interpreted the data.

Wahyu Widodo, Ph. D: Contributed with analysis data; Wrote the paper.

Data availability statement

Supplementary data related to this article has been published online at: Government assistance for exporting firms in Indonesia (Original data) (Mendeley Data). https://data.mendeley.com/datasets/rxnj476rg5/3.

Additional information

Supplementary content related to this article has been published by Ref. [40] at https://doi.org/10.1016/j.dib.2023.109112.

Funding

This work was supported by the Research Grant Riset Kolaborasi Indonesia Tahun 2022.

Declaration of competing interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Appendix.

Table A1.

Definition of Types of National Export Promotion Program

Type of Export Promotion Program	Definition
Information Related Programs
a. Information about opportunities overseas market	A market profile that identifies opportunities for sales in foreign markets. Overview of characteristics and requirements target export market and great opportunities in it. Market Intelligence, Market Briefs, among others.
b. Specific information on requirements and technical information for Export	Technical requirements (requirements and documentation, labeling, customs regulations, tariffs, non-tariffs, cooperation agreements, due diligence, etc.).
c. Publication export	Special publications referring to export activities, including export newsletters, special reports, mailing lists, and directories.
d. Sector specific information certain	Provision of information regarding a specific Sector (e.g., opportunities, market size, market characteristics, competition, demand, special regulations and requirements, etc.)
e. Providing marketing information/advice	Information/advice regarding the entry of foreign markets, positioning, and handling of marketing mix elements.
f. General literature on how to export	Information on handling export documentation, international credit and payment terms, and shipping terms.
g. General information about doing business in a specific country	Comprehensive analysis of the main features of a particular market for the selected export product sector (e.g., economic conditions, political/legal aspects, socio-cultural environment, business norms and practices).
h. List of Buyers, Associations, Importers Abroad, list overseas support service company	Provide lists and information from overseas buyers, importing companies, associations, lists overseas support service companies (legal service offices, marketing, logistics, finance, among others)
i. Practical Information about specific countries	Provide practical information about certain countries related to culture, business climate, port information, connectivity, visas, negotiation tips, international event information, distribution system information, business practices, and other practical information
2. Programs Related to Education and Training
a. Training program base for export	Training program on starting an export business, market access and survey, business plan development, market potential identification, SWOT analysis, export product development/adaptation, Finding Buyers
b. Organizing export seminars/conferences	Organizing seminars, conferences, and workshops that refer to export operations, such as export planning, identification of foreign markets, and export logistics.
c. Providing counseling and coaching advice on export business	Providing export assistance in certain export problem situations, such as handling bad debtors, assessing competitors, and handling foreign exchange transactions.
d. Export management and documentation training	Special export related document handling training, such as bill of lading, letter of credit, and shipping insurance.
e. Special training program to improve skills in exporting	Training programs on specific export issues, such as running an export department, serving foreign customers, and managing relationships with export sales representatives.
f. Training program special for export via e- commerce	Offers courses on e− commerce for national exporters.
g. e -Learning Center	Online learning center and Digital Library (Research Corner, INSW training, Export Rare, Trade Contracts, Export – Import Cargo, Incoterms, Export Learning, Looking for Buyers)
3. Trade Mobility Related Programs
a. Support by overseas trade offices	Establish initial contact with customers, prepare for foreign personnel visits, and follow up on trade leads in foreign markets, using the assistance of foreign government trade offices (ITPC, Trade Attaché, Overseas Trade Representative Office).
b. Assistance with participation in trade fairs/trade show exhibitions	Helping exporters rent and/or decorate a place to display their products internationally
c. Participation in trade missions in foreign markets	Offering financial assistance to exporters, which can take the form of internally (eg inviting foreign businessmen, journalists, or others) or externally (e.g., visiting foreign markets to increase marketing efforts and explore/increase product potential abroad).
d. Exchange platform, Online Platform (B2B)	A digital platform where exporters can interact with buyers
4. Programs Related to Financial Aid
a. Export loan	Provides preferential loans to exporters at low interest rates, usually linked to specific foreign markets.
b. Export credit guarantee	Guarantees provided by the government to exporters to compensate for losses caused by unforeseen commercial and political difficulties in foreign markets.
c. Transfer of funds	Assist exporters in transferring payments by foreign customers, especially in the case of foreign markets without hard currency or fluctuating foreign exchange rates.
d. Exporter Subsidy	Financial subsidy grants to cover export-related costs such as participation in trade fairs, trade missions and educational events, logistics, mandatory overseas documentation, etc.

Table A2.

Table Correlation Analysis

	1	2	3	4	5	6	7	8	9	10	11	12
Export Performance	(0.854)
Information	0.257	(0.888)
Education	0.241	0.820	(0.823)
Mobility	0.433	0.273	0.506	(0.801)
Financial	0.261	0.643	0.805	0.619	(0.820)
Org_Resources	0.559	0.483	0.550	0.587	0.572	(0.712)
Org_Capabilities	0.591	0.516	0.552	0.580	0.577	0.696	(0.710)
Mark_Stratategy	0.544	0.462	0.463	0.304	0.394	0.713	0.686	(0.715)
Competitive_COST	0.500	0.300	0.342	0.126	0.316	0.260	0.260	0.369	(0.843)
Competitive_PRODUCT	0.822	0.285	0.306	0.236	0.277	0.349	0.323	0.428	0.762	(0.825)
Competitive_SERVICE	0.765	0.218	0.303	0.159	0.291	0.363	0.338	0.449	0.759	0.704	(0.794)
Financial Performance	0.751	0.260	0.376	0.395	0.388	0.475	0.476	0.551	0.537	0.688	0.733	(0.849)
Mean	5.01	4.87	4.201	4.09	3.026	4.762	4.915	4.762	3.902	4.682	4.526	4.656
Standard Deviation	1.353	1.443	1.649	1.852	2.197	1.581	1.480	1.422	1.651	1.372	1.461	1.410
VIF Value		1.583	1.871	1.582	1.637	2.561	2.261	1.000	1.675	1.973	2.402

Note. Average Variance extracted (AVE) indicated in diagonal parentheses. Possible multicollinearity among independent variables checked by applying the common rule of tomb setting as cutoff line a VIF of 5.0 (Variance Inflation Factor), with a maximum tolerance of 0.20.

Appendix A. Supplementary data

The following is the Supplementary data to this article.