Export and investment promotion services : service use and its impact on export performance -- results of the Asia surveys

has devoted considerable resources over the past several years to services that directly support exports or export-related foreign investment. This study summarizes results of a survey of 131 exporting firms in India, Indonesia, and Thailand on their use of 33 export services, ranging from foreign market information to production TA; 100 of the firms were randomly selected and 31 had been assisted under A.I.D. projects. The survey findings demonstrate that direct services play a vital role in encouraging new entrants into exporting and in assisting foreign investors. Key services are provided predominantly by business partners (including trade associations, informal contacts, distributors, suppliers, buyers, and licensers, as well as formal joint venture partners). Important services are not provided nearly to the same degree by government or nonprofit agencies, nor are services usually obtained from for-profit professional service firms (e.g., lawyers and consultants). Government services are most useful to foreign investors for basic information early in the decision process, and, for local firms, were helpful in making initial contact with buyers. The characteristics of firms receiving export services made no important difference in service use or impact, except when comparing local exporters with foreign-owned firms. A final section of the report discusses the match between the mix of services provided and those sought by firms, focusing on evidence of potential roles for governments in filling the gaps left by private service providers. Three overall conclusions are reached. (1) Firms rely on networks of associates as their primary source of assistance. (2) Business relationships evolve over time, and the distinction between export promotion and investment promotion will blur due to close business ties. (3) International ventures are fragile in their early stages, particularly if long geographic and/or cultural distances are involved. This is probably the reason that for-profit professional service firms stay out of the investment process until it is well advanced.