Export-specific investments, competitive advantage, and performance in Vietnamese SMEs: The moderating role of domestic market conditions

Abstract

We develop a conceptual model, based on the theories of Resource-based View, Industrial Organization, and Institution-based View, that examines the effect of export specific investments on creating competitive advantage in export markets, as well as the impact of this advantage on the firm's export performance. With a sample obtained from 159 Vietnamese SME exporters, we confirm that investments in export-related human, innovation, marketing, and financial resources help to generate both a cost reduction-based and product differentiation-based export competitive advantage that are conducive to enhanced export performance. The association between export-related resource investments and cost reduction-based or product differentiation-based competitive advantage was also found to be moderated by specific domestic market conditions, namely institutions, infrastructure, bureaucracy, and competition.