(The) research of measuring AEO authorization moderating effect on internationalization of a firm

Abstract

Abstract

The Research of Measuring AEO authorization moderating effect on Internationalization of a firm

Sung Kyun Son College of Business Administration The Graduate School Seoul National University

This study investigates the moderating effect of AEO authorization on internationalization of a firm. An Authorized Economic Operator (AEO) is defined by the WCO SAFE Framework of Standards as a party involved in the international movement of goods, in whatever function, that has been approved by, or on behalf of, a national Customs administration as complying with WCO or equivalent supply chain security standards.

The main objectives of this research are to identify whether AEO authorization may have an influence on internationalization performance of a firm and any moderating effect on the internationalization process of Small to Medium Enterprises(hereinafter, SMEs.) Because SMEs in Korea compose the 99.9% of overall industry, more than 88% of labor forces work in SMEs, despite this growing importance, Korea SMEs recognize the greater importance of AEO authorization yet. Korea's AEO companies are 365 in numbers as of Dec. 2012. A greater number of them are a large company and only a small number of SMEs earn an AEO authorization.

In order to identify the moderating effect of AEO authorization in Korea, the survey questionnaire were conducted on AEO authorization company and company that are in the process of AEO authorization.

First, it is to measure the internationalization performance by specific factors(Firm specific factors, environment factors, C.E.O factors and technology factors)

Second, it is to identify how AEO authorization may have an influence on the internationalization process of a firm.

About 200 hundred companies out of 365 AEO authorized companies were involved in the research. Due to the insufficient number of export AEO authorized company status and SMEs, the survey included AEO authorized company and a company that are in the process of AEO authorization.

The research is to identify the AEO authorization moderating effect on internationalization process by measuring factors in 5 Likert Scale. The measurement factors were based on previous literature studies in firm internal factor, firm external factor(foreign market environment), technology factor(technology capacity) and CEO factor and AEO authorization or Non-AEO.

In this research, Cronbach's a index were used to validate the internal consistency in the reliability of the measurement criteria.

International performance variables involve 6 questions and obtained as one factor. The overall variable ratio 80.939%. It shows a very high validity in respect of measurement criteria.

Firm specific variables are total 9 questions and 2 factors were derived. Each factor is managing market information and R&D capacity. These 2 factors explain 43.690 in managing market information, 40.203 in R&D capacity. The aggregated variable ratio are 83.893%. The result of factor analysis, there are high validity in measuring tool.

Technology capacity ratio is composed of three questions and used as one factor. The overall variable ratio is 92.988. In analyzing the factor outcome, there seems to be a very high validity of the measurement tool.

In reflecting the difference in company size, R&D Capacity (p<.001), overseas market environment(p<0.05), technology capacity(p<.001) are shown to be statistically meaningful difference. In other words, R&D capacity, overseas market environment, technology capacity are higher in a large company group than SMEs. Especially, R&D capacity and technology capacity in a large company group are shown to be very higher than SMEs.

In reflecting the difference in AEO authorization, R&D Capacity (p<.005), technology capacity (p<.005) are shown to indicate the statistically meaningful difference. That is, R&D and technology capacity are higher in AEO company than Non-AEO company.

Internationalization performance has a positive correlation relationship with overseas market environment(r=.267)

In order to identify the internationalization performance factors effect on internationalization performance by regression analysis, there are no significant variables in this research and no moderating effect on internationalization performance.

This can be explained through the limited number of AEO authorization for SMEs data and a great number of large companies tested in this research are already in the internationalization stage. If there are more SME AEO companies to test for regression analysis in the future. The further analysis can be made to validate internationalization performance.

keywords : AEO, Internationalization, SME, Moderating effect Student Number : 2003-20797