Res/342 - Hypothesis Identification Article Analysis

Hypothesis Identification Article Analysis

RES/342

This is a review of the article "The Relationship between Firm Size, Competitive Advantages and Export Performance Revisited." by Oystein Moen. The article takes on the theories that the size of a company will determine the behavior and performance of its international market. Prevailing thoughts have been large companies are more capable in competing in the international market than small companies. With supporting theories of more resources, such as financial resources, personnel, and technology, the theory has often been thought as correct. The article has three main hypotheses, first is there is no direct link between a company’s size and export performance. Second, there is a difference in the competitive advantages between companies of different size. And finally is the hypothesis that states there are differences in the export motives between companies of different sizes.

The research shows there were not any major differences between companies due to size or growth in relation to export power. Quite the opposite was shown to be true. Small companies had the highest export share and growth within the international market. It is noted the largest firms had better performance based on their own personal calculation of success.

In five out of six possible situations between company size and export performance it was shown to have no relative significance. The only significant link was a subjective evaluation of performance that implied a better performance by the largest companies. None of the other measures (export intensity, export growth) were related to company size. All were conclusive that the first hypothesis was proven correct.

The second hypothesis suggested that there would be a relationship between company size and specific competitive advantages. Research shows very small companies have a strong competitive edge with regard to technology. Many small exporting companies are technological in...