An empirical investigation on factors influencing on insurance issued by export guarantee funds

Article history: Received January 12, 2013 Received in revised format 30 May 2013 Accepted 5 June 2013 Available online June 7 2013 This paper attempts to find important factors influencing on insurance issued by export guarantee funds. The study uses factor analysis to detect important factors based on a questionnaire in Likert scale. The study has determined four factors including risk management, customer oriented, quality management and trade management. The first factor is associated with risk management and it includes four sub-factors. The factors include being responsive, reliability, service quality and customer detection and reliability plays the most important factor. The second factor is associated with being customer oriented where the factor includes four components including cost recognition, access, marketing knowledge and the level of management training. The third factor is associated with quality management, which includes four variables including responsiveness, reliability, quality of services and customer recognition. Finally, the last factor is associated with trade management, which includes three variables including trade risk, insurance premium and currency. © 2013 Growing Science Ltd. All rights reserved.


Introduction
There are many reasons for developing countries to look for more revenue through exporting goods and services.However, there are different barriers on gaining successful exports around the world such as international laws, domestic barriers, etc. (Hennig-Thurau, 2004;Singh & Koshy, 2011;Fuentes-Fuentes et al., 2011;Idris & Zairi, 2006;Ndubisi, 2012).During the past few years, there are many studies for finding important factors influencing exports.Ross and Pike (1997), for instance, provided some evidence from Canadian industries on export credit risks and the trade credit offer.Serra et al. (2012), for instance, determined which particular organizational and managerial factors contributing to the propensity to export in a declining sector.They analyzed firms' resources and capabilities, as well as decision-makers' objective and subjective characteristics in a sample of 167 Portuguese and 165 UK firms in the textile and clothing industry.They stated that, for Portugal, the size of firm and the educational level of managers were the key determinants of export propensity.As to the UK, age and perception of expenditures were the essential factors.Monreal-Pérez et al. (2012) analyzed the effect of innovation on a firm's export activities while discussing potential endogeneity concerns.They also investigated the effect of export activity on a firm's innovation performance.They stated that innovation could induce firms to increase their export activities.Bloemer et al. (2012) explored the impacts of trust, commitment, relation-oriented competencies and entrepreneurial competencies on export performance on exporting organizations located in the Netherlands.They proposed a conceptual model and tested the effects of trust and affective commitment act as energizing forces for the development of competencies.Aydemir and Gerni (2011) measured service quality of export credit agency in Turkey by using SERVQUAL (Parasuraman, 1990(Parasuraman, , 2000;;Parasuraman et al., 1994).Ellis et al. (2011) proposed that in exchange situations involving transition economy firms, the advantages of long-distance trade could outweigh the expenditures of knowledge acquisition.They reported some support for this proposition in their study by building a link between the export intensity of Chinese exporters and their acquisition of marketing know-how.They also offered some evidence that the marketing knowledge of transition economy firms had a positive impact on overall performance.Mah (2006) provided some other evidences on the effect of export insurance subsidy on export supply from Japan.Rienstra-Munnicha, and Turvey (2002) performed an investigation on the relationship between exports, credit risk and credit guarantees in Canadian industries.Wang and Barrett (2002) presented a new empirical look at the longstanding question of the impact of exchange rate volatility on international trade flows by studying the case of Taiwan's exports to the United States over the period of 1989-1998. Dewit (2001) ) concentrated on the public provision of export insurance where the objective was insurance against the risk of default faced by firms exporting to risky markets, these insurance programs were often embedded in more global policy objectives of the exporting country's government.The study investigated how premium rating of official export insurance was influenced by strategic export promotion and the pursuit of other political objectives.Abraham and Dewit (2000) explained that export promotion did not necessarily imply trade distortions and that most export destinations did not benefit from insurance premium subsidies.Kim et al. (2012) investigated the associations among different quality management (QM) practices and investigate which QM practices directly or indirectly relate to five types of innovation: radical product, radical process, incremental product, incremental process, and administrative innovation.They reported that a set of QM practices through process management had a positive relationship with all of five kinds of innovation.Their findings also disclosed that the value of an individual QM practice was tied to other QM practices.Mokhtari et al. (2012) presented a decision support framework for risk management on sea ports and terminals based on fuzzy set theory and evidential reasoning approach.

The proposed study
The proposed study of this paper attempts to find important factors influencing on insurance issued by export guarantee funds.The study designs a questionnaire consists of 23 questions and, after preliminary questionnaire, the questions were reduced to 20 questions.The study distributes 200 questionnaires among experts, which were arranged in Likert scales.Table 1 demonstrates some basic statistics on our survey.

The results
In this section, we present details of our findings on applying factor analysis.The study has determined four factors including risk management, customer oriented, quality management and trade management.

The first factor: Risk management
The first factor is associated with risk management and it includes four sub-factor including being responsive, reliability, service quality and customer detection.Table 3 shows details of our findings, The results of Table 3 indicate that reliability is the most important factor followed by service quality, being responsiveness and customer detection.

The second factor: Customer orientation
The second factor is associated with being customer oriented where the factor includes four components including cost recognition, access, marketing knowledge and the level of management training and the results of factor analysis are summarized in Table 4.The results of Table 4 clearly specified that cost recognition is number one priority followed by marketing knowledge, access and level of knowledge.

The third factor: Quality management
The third factor is associated with quality management, which includes four variables including responsiveness, reliability, quality of services and customer recognition and the results of factor analysis are summarized in Table 5.The results of Table 5 show that quality of services is number one priority followed by quality of services, responsiveness and customer recognition.

The fourth factor: Trade management
The fourth factor is associated with trade management, which includes three variables including trade risk, insurance premium and currency and the results of factor analysis are summarized in Table 6.The results of Table 6 demonstrate that trade risk is number one priority followed by insurance premium and currency changes.

Conclusion
In this paper, we have presented an empirical investigation to detect important factors influencing export insurance.The study has implemented factor analysis and detected four factors in this study.In terms of risk management, reliability has been considered as the most important factor followed by service quality, being responsiveness and customer detection.In terms of customer orientation, cost recognition was number one priority followed by marketing knowledge, access and level of knowledge.In terms of quality management, quality of services is number one priority followed by quality of services, responsiveness and customer recognition.Finally, in terms of trade management, trade risk has been number one priority followed by insurance premium and currency changes.

Table 3
The summary of factors associated with risk management

Table 4
The summary of factors associated with customer orientation

Table 5
The summary of factors associated with quality management

Table 6
The summary of factors associated with trade management