Network connections, distance and exports: applying the Delta model to the internationalisation of companies

Purpose This study aims to analyse the effect of strong network linkages with clients, suppliers, official bodies and complementary firms, on export performance, and whether these connections exercise a moderating effect on the distance between markets. Design/methodology/approach Using a Heckman model, this study analyses the factors influencing the probability and intensity to export of a representative sample of Spanish companies and 49 export markets, and the moderating effects of network linkages on the distance between the origin and destination markets. Findings This paper presents novel empirical evidence, showing that system linkages are a key factor for increasing the probability of entering new markets, and chain linkages reduce the negative effects of geographical distance. Research limitations/implications This study extends the analysis to other variables proposed by the Delta model that can influence export propensity and intensity. Also, the sample is fundamentally composed of small companies, so the results may not be applicable to large winemaking companies. Practical implications System linkages increase the firm’s probability of entering new markets. Chain linkages mitigate the negative effects of geographical distance. Managers should establish strong network linkages with institutions and complementary companies to facilitate the entry into distant markets, and with customers and suppliers to reduce the negative effect of these distances. Public institutions should favour the market prospection stage to stimulate international trade. Originality/value The main contribution is to analyse the role of different network linkages, their intensity and their role in the internationalisation of companies.