Determinants and Consequences of Product Differentiation Strategy: Evidence from Chinese Indigenous Exporters

Focusing on Chinese indigenous exporters, this research investigates the antecedents of the product differentiation strategy (PDS), and its impacts on export performance with the moderating role of export target markets. Drawing from the contingency theory and strategy management framework, the authors adopt structural equation modeling (SEM) to analyze the survey data collected from 195 Chinese indigenous exporters. The empirical results suggest that the PDS positively affects Chinese exporters’ performance. Firms are more likely to adopt the PDS when innovation and marketing capabilities are high and when they export to turbulent markets. The positive impact of the PDS on export performance is stronger when firms export to developed (vs. other emerging) markets. With the unique perspective from emerging markets, the authors theoretically discuss and empirically examine the antecedents-PDS-performance link. This research suggests that Chinese export firms rationally adopt the PDS and actively cultivate technology and innovation capability and international marketing competence on export businesses.