The Change of Sales Modes in International Markets - Empirical Results for German and British High-Tech Firms

48 Pages Posted: 6 Dec 2005 Last revised: 25 Jan 2015

See all articles by Helmut Fryges

Helmut Fryges

Technopolis Group; University of Tasmania - Australian Innovation Research Centre; Center for European Economic Research (ZEW)

Date Written: November 2005

Abstract

The choice of the appropriate sales mode belongs to the firm's most important strategic decisions after entering into a foreign market. Thus, it is important that the selected foreign sales mode best suits a firm's available resources and capabilities. However, these resources and capabilities change over time. Therefore, it might be necessary for a firm to adjust its foreign sales mode to these changing firm-specific conditions. Using a longitudinal data set of newly founded technology-based firms in Germany and the UK, this paper applies logistic regressions and analyses empirically the probabilities of changing between the two sales modes most frequently used by the sampled exporters: direct exports and exporting via an intermediary. The estimation results confirm the importance of the firm's physical and intangible resources as well as the influence of transaction-specific assets on a sales mode change. However, the effects of the latter factors might be dominated by strategic considerations that are not covered by our data. For example, a young high-tech firm will resort to an intermediary regardless of its resources and transaction-specific assets if this is the only way of coming into contact with foreign customers.

Keywords: High technology industries, internationalisation, sales modes

JEL Classification: F23, L60, L86

Suggested Citation

Fryges, Helmut, The Change of Sales Modes in International Markets - Empirical Results for German and British High-Tech Firms (November 2005). ZEW - Centre for European Economic Research Discussion Paper No. 05-082, Available at SSRN: https://ssrn.com/abstract=862165 or http://dx.doi.org/10.2139/ssrn.862165

Helmut Fryges (Contact Author)

Technopolis Group ( email )

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Frankfurt am Main, 60384
Germany

University of Tasmania - Australian Innovation Research Centre ( email )

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Sandy Bay TAS, Tasmania 7005
Australia

HOME PAGE: http://www.utas.edu.au/airc

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
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Germany

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