Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review

Teshome Bekele Nege; Mekonnen Bogale Abegaz

doi:doi:10.11648/j.ajtab.20241002.12

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Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review

Teshome Bekele Nege^*

, Mekonnen Bogale Abegaz

Published in American Journal of Theoretical and Applied Business (Volume 10, Issue 2)

Received: 11 August 2024 Accepted: 3 September 2024 Published: 26 September 2024

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Abstract

This comprehensive assessment of the literature looks at the strategic significance of location for export competitiveness. In order to provide a nuanced understanding of how geographic location affects firms' ability to compete in export competitiveness, the review synthesizes key findings and insights from a thorough analysis of 71 scholarly articles from reliable databases, including Scopus, Web of Science, JSTOR, Science Direct, PubMed, DOAJ, and IEEE Xplore. A number of criteria are identified and categorized in the evaluation, including market accessibility, established trade routes and infrastructure, availability of resources, capital, and inputs, institutional support, trade agreements, economic integration, and regulatory framework. Important factors that affect export competitiveness include the innovation environment, industry clusters, the agglomeration effect, the availability of skilled workers, and proximity in terms of language and culture. The case study on best practices has been delivered. Moreover, it highlights gaps in the literature and offers insightful information for new lines of inquiry. This review provides a comprehensive understanding of the strategic significance of geography in influencing enterprises' export plans and performance in the global marketplace by combining empirical data with theoretical frameworks. The review's conclusions broaden our theoretical and practical understanding of how firms' location decisions are influenced by location, which helps managers run their businesses profitably.

Published in	American Journal of Theoretical and Applied Business (Volume 10, Issue 2)
DOI	10.11648/j.ajtab.20241002.12
Page(s)	33-46
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Strategic Importance of Location, Export Competitiveness, Geographic Advantages, International Trade and Location Strategy

1. Introduction

International business and economics have paid close attention to the strategic significance of location in determining export competitiveness

[82]

. A company's capacity to access markets, streamline supply chains, and take advantage of local resources and competencies is greatly influenced by its location. A firm's export success is influenced by a number of important criteria, including access to cutting-edge infrastructure, skilled workforce, and proximity to important markets

[40]

. Policymakers and corporate executives who want to strengthen their competitive advantage in the global market must comprehend the strategic significance of location

[53]

. Location-specific benefits might provide businesses special chances to cut expenses, enhance product quality, and react quickly to market demands. Furthermore, in light of globalization and the evolving dynamics of international commerce, the relationship between location and export competitiveness is becoming more and more significant

[88]

There is a need for a systematic literature review that analyzes and synthesizes the existing research on this topic because, despite the well-established importance of location for export competitiveness, the current literature is fragmented, with studies focusing on different aspects of location and competitiveness across various industries and regions

[13]

. To bring these results together, spot trends, and offer a clear picture of how geography affects export competitiveness, a thorough examination is required. For a number of reasons, the topic of "Strategic Importance of Location for Export Competitiveness" warrants a thorough literature assessment. First of all, a review of this kind offers a thorough synthesis of the literature, giving scholars, decision-makers, and practitioners new perspectives on the different ways that geography affects export competitiveness

[80]

. The review is able to pinpoint important variables, patterns, and elements influencing the connection between location and export performance by methodically going over and evaluating a broad spectrum of academic publications and empirical studies. Additionally, a thorough review aids in addressing the shortcomings and contradictions found in the corpus of existing research. Researchers can determine knowledge gaps and areas in need of additional research by critically analyzing the approaches, results, and conclusions of previous studies

[45]

. In order to advance theoretical understanding and guide evidence-based policy decisions targeted at improving export competitiveness, it is imperative that gaps and inconsistencies be identified.

Furthermore, a thorough assessment of the literature on this subject is crucial for helping companies that operate in international marketplaces make strategic decisions. Businesses looking to maximize their market access, supply chain management, and location strategies will benefit greatly from the review's synthesis of information from industry publications and academic research

[14]

. Gaining a competitive edge in global trade, identifying growth possibilities, and mitigating risks are all made possible for organizations that comprehend the strategic implications of location. The results of a thorough review on the strategic significance of location for export competitiveness may also have an impact on regional planning programs and economic development policies. Policy makers can create focused interventions to improve infrastructure, strengthen regulatory frameworks, and encourage investment in critical industries by highlighting the elements that affect export competitiveness at the national, regional, and local levels

[6]

. As a result, both established and developing economies may experience increased economic growth, the creation of jobs, and sustainable development

[22]

. Through a comprehensive analysis of current literature and identification of knowledge gaps, this review can aid in the creation of strategies that effectively capitalize on geographical advantages in international markets.

The strategic significance of location for export competitiveness has emerged as a critical factor determining the success and sustainability of firms in the ever-changing global trade market. It is impossible to overstate the importance of geography in promoting trade, streamlining supply chains, and opening doors to a variety of markets. It's critical for organizations to comprehend and take advantage of the strategic implications of location as they work to increase their market share and reach in a world where connectivity is gaining importance. The goal of this introduction is to examine the various aspects of location's strategic significance for export competitiveness. This paper attempts to provide a thorough review of the numerous aspects and mechanisms through which location effects export competitiveness by examining the literature and gaining insights from reliable databases. One of the primary factors influencing a country's or region's trade competitiveness is its geographic location. The cost and effectiveness of exporting goods and services are greatly impacted by proximity to important markets, transit hubs, and trade routes. Nations located close to important ports or at crucial crossroads typically enjoy a competitive edge in trade because of cheaper shipping costs and quicker delivery periods

[83]

. Moreover, geographic closeness promotes economic integration and allows the establishment of regional trading blocs and agreements

[41]

Export competitiveness is largely determined by the effectiveness and quality of the logistics and transportation infrastructure in addition to geographic proximity. A region's or nation's appeal as an export center is increased by a well-developed infrastructure network that includes ports, airports, railroads, and roadways that facilitate efficient cargo transportation and shorten transit times

[45]

. Furthermore, the significance of connectivity for export competitiveness has been further emphasized by developments in digital infrastructure and communication technology. Small and medium-sized businesses (SMEs) may now access foreign markets with never-before-seen ease because to e-commerce platforms and digital marketplaces, which have completely changed global trade

[15]

. The legislative framework controlling international commerce and the terms of market access are also linked to the strategic significance of location for export competitiveness

[6]

. Furthermore, a favorable business climate for exporters is greatly aided by regulatory clarity and transparency. Exporters can more successfully navigate international markets when there are clear and predictable regulatory frameworks in place, as they lower uncertainty and compliance costs

[63]

. On the other hand, bureaucratic inefficiencies and regulatory obstacles can reduce exporters' ability to compete by raising their transaction costs, lead times, and compliance requirements.

The strategic significance of location for export competitiveness, therefore, includes a wide range of elements, including geographic advantage, connectivity and infrastructure, and market access circumstances. A nation's or region's capacity to compete in the global economy is largely determined by its physical closeness to important markets, effective transportation networks, and advantageous regulatory frameworks. Understanding and utilizing the strategic implications of location becomes essential for boosting export competitiveness and maintaining long-term success as organizations traverse the complexity of international trade. This introduction has given readers a fundamental knowledge of the relationship between location and export competitiveness by synthesizing observations from reliable databases. This paper's later sections focuses on certain aspects of this subject, analyzing case studies, empirical data, and theoretical frameworks to clarify the processes by which location affects export competitiveness in various situations.

Even while location is acknowledged as a crucial component in determining export competitiveness, there is still a dearth of thorough knowledge about the precise methods and factors that geography uses to affect a nation's or region's capacity to compete in international markets

[80]

. This research challenge emphasizes the necessity of conducting a thorough analysis and synthesis of the body of literature in order to pinpoint the essential factors influencing location's impact on export competitiveness. The systematic review seeks to advance theoretical knowledge, empirical support, and useful insights regarding the strategic implications of location for export performance by tackling this research subject. In order to provide a thorough understanding of how location affects export competitiveness across a variety of economic activities, the review's scope includes studies that look at the strategic importance of location for export competitiveness in a variety of geographical contexts, including both developed and developing economies and diverse industries and sectors, such as manufacturing, services, agriculture, and technology. The studies must also be published within a specific time frame in order to capture recent developments and trends in the literature. But context and theoretical foundation can also be found in historical viewpoints and foundational works.

In order to better understand the strategic significance of location for export competitiveness across a range of industries and geographical regions, this systematic literature review aims to: identify and synthesize existing research on the subject; analyze key determinants and mechanisms through which location influences export competitiveness, including factors like proximity to markets, transportation infrastructure, and regulatory environments; assess the empirical evidence and theoretical frameworks used in the literature to conceptualize and measure the strategic impact of location on export performance; look at best practices; and identify gaps, inconsistencies, and areas of consensus within the literature. Finally, it suggests future research avenues to advance theoretical understanding and empirical knowledge concerning the strategic importance of location for export competitiveness.

2. Theoretical Review

Several hypotheses in the literature support the strategic significance of location for export competitiveness. The New Economic Geography hypothesis is a well-known theory that highlights how agglomeration effects, transportation costs, and economies of scale shape the spatial patterns of trade and economic activity

[51, 43, 6]

. This theory states that businesses cluster in areas where they may take advantage of input availability, cost benefits, and market closeness, all of which increase their export competitiveness

[33]

. Porter's Diamond Model is another pertinent theory that posits four interrelated factors—factor circumstances, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry—influence a firm's competitiveness in a given region

[72]

. In order to increase export competitiveness, this theory highlights the significance of a positive local environment as well as the existence of institutions and industries that complement one another

[23]

. Moreover, the firm's resource-based view emphasizes the significance of location-specific resources and competencies in establishing a long-term competitive advantage

[8]

. This viewpoint holds that businesses use location-specific advantages, like access to trained workforce, abundant natural resources, or specialized infrastructure, to increase their export competitiveness

[71]

. Several major topics come out of the theoretical literature study on the strategic significance of location for export competitiveness.

Due to considerations like agglomeration effects, transportation costs, market proximity, and input availability, academics contend that location has a major impact on a firm's capacity to compete in the global market

[77, 51, 6]

. Furthermore, studies highlight how government policies, infrastructure, and institutions shape the competitive advantage that comes from a certain region

[75, 37]

. Additionally, research emphasizes the value of regional ecosystems and geographic clusters in promoting innovation, information sharing, and inter-firm cooperation—all of which boost export competitiveness

[73, 49, 11]

. Furthermore, the notion of "place-based" development emphasizes the necessity of customized approaches that capitalize on the distinctive qualities of certain sites to improve businesses' global competitiveness

[61]

. In order to improve export competitiveness, research emphasizes the significance of geographic clusters and regional ecosystems in promoting innovation, knowledge spillovers, and inter-firm collaboration

[39, 49, 11]

. Theoretical research highlights how geography affects export competitiveness in a variety of ways, highlighting the interaction of institutional, agglomeration, and geographic factors in determining firms' worldwide strategy.

3. Methodology

The researchers set precise standards for choosing pertinent studies, including the following: they had to be written in English, have to be published between 2011 and 2024, cover the entire globe, include both developed and developing economies, and have to be qualitative, quantitative, mixed, conceptual, empirical, and theoretical in nature. By doing this, the review is guaranteed to be thorough and concentrated on answering the research topic

[80]

. To find pertinent material from reliable databases including Scopus, Web of Science, JSTOR, ScienceDirect, PubMed, DOAJ, and IEEE Xplore, we also devised a methodical search approach. To enhance the retrieval of pertinent research, we combined keywords, search criteria for "international trade" and/or location strategy, "geographic advantages and/or export competitiveness," and "strategic importance of location and/or export competitiveness"

[45]

. The results of a screen search are determined by predetermined inclusion and exclusion criteria. To find potentially relevant research, first screen the titles and abstracts. Then, do a full-text review to determine which articles are eligible for inclusion in the review

[6]

. Next, in order to methodically extract pertinent data from the included studies—such as study characteristics, major findings, methodology, and theoretical frameworks—we created a standardized data extraction form. Combine the data that has been gathered to find recurring themes, trends, and patterns in several studies

[16]

. Use suitable quality evaluation instruments or checklists to evaluate the included studies' rigor and quality. This guarantees the validity and dependability of the results and aids in locating any methodological flaws or biases in the literature

[41]

Examine combined data to answer the review's research question and objectives. To find connections, patterns, and gaps in the literature, these required thematic analyses

[63]

. Using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) standards as a guide, clearly and systematically present your findings. Transparently document the methodologies used for data extraction, research selection criteria, quality assessment, and search operations

[80]

. We can perform a thorough and transparent systematic literature evaluation on the strategic significance of location for export competitiveness by following these methodological procedures, which will yield insightful information for theory, practice, and policy.

Download: Download full-size image

Figure 1. PRISMA.

4. Results

Download: Download full-size image

Figure 2. Trends of the studies across time.

As indicated in the time of publications, there is no time gap observed, because most publications are recent that concentrated from 2017 to 2023.

Download: Download full-size image

Figure 3. Methodological Gaps.

Download: Download full-size image

Figure 4. Country Wise Gaps.

As the methodological gap is concerned, most of the studies conducted in strategic importance of location for export competitiveness, were quantitative researches. There is little qualitative and mixed research. Therefore, it needs to study qualitative and mixed research also. Its conceptual understanding also has to be made clear.

Here as seen, the study on strategic importance of location for export competitiveness has been done a lot in advanced economies. While, developing countries do have a very little share.

4.1. Factors Through Which Location Influencing Export Competitiveness

In today's worldwide market, location is a key factor in determining an export's competitiveness. The strategic implications of location for improving export competitiveness have been the subject of much research, with several factors—including government regulations, agglomeration effects, transportation infrastructure, and market proximity—being taken into account.

4.1.1. Proximity to Markets, Well Developed Infrastructure and Major Trades Routes

One important factor affecting export competitiveness is proximity to markets

[82]

. Businesses that are situated closer to their target consumers typically experience faster delivery times and reduced transportation costs, giving them a competitive advantage

[39]

. Furthermore, a strong transportation infrastructure lowers logistical barriers and promotes effective supply chain management, both of which increase export competitiveness

[44, 47]

. Being close to export markets is essential for businesses looking to successfully enter foreign markets and compete with regional producers. Companies that are situated in greater proximity to their intended markets stand to gain from lower transportation expenses, faster delivery times, and more adaptability to evolving consumer needs, all of which contribute to increased export competitiveness

[36]

Connection and efficient transportation infrastructure are essential for businesses to be able to reach export markets, deliver goods on schedule, and optimize the supply chain as a whole. Nations with highly developed transportation networks—such as ports, highways, and railroads—also have more open trade and are more competitive exporters

[21]

. Additionally, enterprises' access to distant markets is improved, transportation costs are decreased, and transit times are shortened when they have connectivity to international trade routes, multimodal transportation choices, and logistics hubs

[67]

. Additionally, by facilitating regulatory compliance, trade facilitation measures, and customs clearance processes, this connectivity streamlines businesses' export operations and raises their level of competitiveness in international trade. In summary, key factors influencing a firm's ability to compete internationally are its accessibility to suppliers, markets, and effective transportation infrastructure. Making strategic location decisions that maximize access to these variables can greatly improve a firm's ability to reach markets, increase production efficiency, and compete globally.

4.1.2. Access to Inputs, Finance and Resources

Studies highlight how vital it is for businesses to have access to resources, capital, and inputs in order to be competitive internationally. The importance of input access for a firm's export competitiveness has been emphasized by recent studies. Businesses in areas with easier access to input suppliers exhibit higher production levels and are more inclined to participate in exporting

[1]

. Furthermore, close proximity to suppliers of inputs lowers manufacturing costs significantly for businesses, especially those in industries that extensively depend on intermediate items

[48]

. One important factor that still affects a company's ability to compete internationally is its access to financing. Companies that have greater access to financing are more likely to exhibit higher export intensity and participate in export operations

[9]

. Furthermore, having access to a variety of funding sources, such as private equity and venture capital, has a beneficial effect on a company's export performance by allowing them to make investments in innovation and market development

[57]

. Current research highlights how crucial resource accessibility is to a company's ability to compete internationally. Enterprises' innovation skills and export performance are enhanced by their physical closeness to research institutions and innovation hubs

[19]

. Corresponding to this, companies in areas with robust industry clusters and business networks gain from increased resource sharing and cooperation, which boosts export performance

[76]

Generally, new research confirms the strategic significance of input, financing, and resource accessibility for businesses' ability to compete internationally. Businesses in areas with easier access to these vital components have a higher chance of succeeding in global marketplaces, increasing efficiency, and maintaining a competitive edge. For a firm's manufacturing processes and cost competitiveness, it is imperative that it is situated in close proximity to suppliers of intermediate goods, components, and raw materials. Companies that are close to their suppliers are more productive, have lower production costs, and have better quality control, all of which allow them to charge competitive pricing in export markets

[1]

. Furthermore, being geographically close to suppliers promotes tighter cooperation, quicker communication, and more seamless logistics coordination, which lowers supply chain interruptions and improves businesses' capacity to fulfill export orders on time

[3]

. In addition to gaining access to new technology and leveraging the experience of their suppliers, businesses that are close together can develop more effectively and compete more successfully in international marketplaces. Additionally, being close to markets enables businesses to develop deeper client relationships, better understand local consumer preferences, and modify products and services accordingly

[29]

. This close closeness makes it easier to obtain market intelligence, customize marketing strategies, and localize brands—all of which help businesses gain a competitive edge in export markets.

4.1.3. Institutional Support, Trade Agreement and Economic Integration

Government initiatives, rules, and other institutional assistance are essential for improving export competitiveness. Effective trade logistics, open customs processes, and legislative frameworks that support business growth are critical for opening up export markets and cutting trade expenses

[4]

. Furthermore, the function that government-sponsored trade missions and export promotion organizations play in helping businesses—especially small and medium-sized companies—navigate global markets and get past export hurdles

[32]

. The impact of trade agreements on enterprises' export competitiveness is emphasized by empirical research. Comprehensive and Progressive Agreement for Trans-Pacific Partnership affects the export performance of businesses

[30]

. They conclude that member nations' export volumes have significantly increased and are becoming more diverse. Additionally, preferential trade agreements support trade in services, emphasizing the value of mutual recognition agreements and regulatory consistency in boosting cross-border service trade

[27]

. According to recent studies, enterprises' export competitiveness is still shaped by economic integration attempts. For instance, the Single Market of the European Union affects businesses' export practices, highlighting the advantages of tariff-free access, unified laws, and bigger markets for exporters inside the EU

[58]

Additionally, regional economic integration impacts firms' productivity and innovation, finding positive effects on firm performance stemming from increased market access, competition, and knowledge spillovers within integrated markets

[25]

. Generally, the literature highlights the critical role of institutional support, trade agreements, and economic integration in shaping firms' export competitiveness. Firms located in regions with supportive policies, preferential trade access, and integrated markets are better positioned to succeed in global trade. The body of research often emphasizes how important trade agreements, institutional support, and economic integration are in determining a firm's ability to compete internationally. Businesses are more likely to prosper in international trade when they are based in areas with favourable trade policies, integrated marketplaces, and supportive policies.

4.1.4. Regulatory Frame Work

The strategic significance of location for export competitiveness is heavily influenced by government policies and regulations

[17]

. International market access for businesses can be facilitated or hindered by tariffs, trade agreements, investment incentives, and regulatory frameworks

[15]

. Export competitiveness can be increased by, for example, offering exporters subsidies or making investments in trade infrastructure, which can reduce manufacturing costs and increase market access

[83]

. Reducing trade costs, increasing supply chain efficiency, and boosting enterprises' competitiveness in export markets all depend on effective trade facilitation policies and expedited customs procedures

[4]

. To promote cross-border trade and speed up the customs clearance process, a new study highlights the significance of updating customs systems, putting electronic documents into place, and harmonizing trade regulations

[67]

. Furthermore, trade facilitation changes have a major impact on businesses' export performance, with nations that adopt trade facilitation policies reporting higher rates of export growth and greater trade openness

[21]

. In order to exceed customer expectations and get access to overseas markets, companies must adhere to quality standards and regulatory regulations

[7]

. Furthermore, especially in high-income countries, enterprises' credibility, reputation, and market access can be improved by adhering to international quality standards, such as ISO certification

[27]

. Mutual recognition agreements and regulatory harmonization has significant impact on encouraging market integration, cutting costs associated with compliance, and eliminating redundant testing and certification processes in order to facilitate trade

[31]

. For innovation, technology transfer, and investment in export-oriented businesses to flourish, effective intellectual property rights protection is essential

[62]

. Strong intellectual property rights regimes in drawing in foreign direct investment, promoting knowledge-intensive industries, and boosting businesses' competitiveness in international markets has significant impact

[38, 55]

. Additionally, there is positive correlation that exists between intellectual property rights enforcement practices and a company's ability to export, with better enforcement practices being linked to larger export quantities and greater export diversification. To sum up, the regulatory framework facilitates commerce, ensures regulatory compliance, and protects intellectual property rights, all of which have a strategic impact on how competitively export-ready businesses are. Enterprises situated in areas with effective trade facilitation policies, quality benchmarks, and intellectual property rights safeguards are more likely to thrive in global marketplaces.

4.1.5. Innovation Ecosystem, Industry Clusters, Agglomeration Effect and Skilled Labor Availability

The concept of agglomeration, businesses stand to gain by being situated close to other businesses or industries that share comparable characteristics and this clustering effect promotes economies of scale, specialized labor pools, and knowledge spillovers, all of which increase export competitiveness

[60, 68]

. In addition, industrial clusters help businesses innovate and collaborate, which helps them become more visible on the international stage

[52, 54]

. Current empirical research highlights how important the innovation ecosystem is to promoting export competitiveness. A study discovered that nations with thriving innovation ecosystems—those marked by significant R&D investments, industry-academia collaboration, and government policies that promote the sector—showed higher levels of export sophistication and technological

[20]

. In a similar vein, innovation policies affected the export performance of businesses throughout Europe, emphasizing the link between businesses' global competitiveness and innovation-friendly environments

[65]

. There exists the strategic significance of fostering an innovation ecosystem that supports knowledge development, technology adoption, and export-oriented entrepreneurship sophistication and cutting-edge technology

[20, 65]

The significance of industry clusters in augmenting enterprises' export competitiveness has been highlighted by recent empirical investigations. For example, researchers looked into the relationship between industrial agglomeration and export behavior in the UK and found that companies in industry clusters had higher export sales and were more willing to export

[5, 28]

. Additionally, other researcher looked at how industry clusters affected how well businesses performed exporting around Europe, emphasizing the benefits of supplier networks, labor market pooling, and localized knowledge spillovers

[18]

. Industry clusters promote information exchange, specialization, and cooperation, which boosts businesses' productivity and global competitiveness

[28, 18]

. The significance of the agglomeration effect for a firm's export competitiveness is supported by the findings. In an analysis of the relationship between industrial agglomeration and American businesses' export practices, for instance, companies based in agglomerated locations had higher export sales, were more inclined to innovate, and engaged in exporting

[26]

. An analysis of the agglomeration economies linked to industry clusters in European cities has been conducted and the findings demonstrated the beneficial effects of labor market pooling, localized knowledge spillovers, and infrastructure investments on the export performance of businesses

[70, 78]

. The strategic benefits of agglomerated regions in promoting innovation, productivity, and export-oriented operations has been highlighted

[26, 78]

. Research keeps showing how vital access to skilled labor is to a company's ability to compete internationally. For example, skilled labor has impact on firms' export decisions and found a positive correlation between skilled labor intensity and export participation

[28]

. Additionally, a study that looked at how the availability of skilled labor affected businesses' export practices internationally and discovered that places with higher skilled worker concentrations had more sophisticated and competitive export industries

[59]

These results highlight the strategic value of funding training, education, and immigration laws to guarantee a skilled labor pool that satisfies the demands of export-oriented businesses

[64, 59]

. Thus, data emphasizes how crucial the innovation ecosystem, industry clusters, agglomeration effect, and availability of skilled labor are strategically for a firm's capacity to compete internationally. Enhancing enterprises' competitiveness in global markets requires policies and programs that support industry clustering, stimulate innovation, facilitate agglomeration economies, and build a trained workforce.

4.1.6. Cultural and Linguistic Proximity

Closeness in terms of language and culture shapes the strategic significance of location for export competitiveness. Smoother commercial transactions, communication, and relationship-building can be facilitated by trading partners having comparable cultural norms, values, and language

[46]

. This closeness lowers barriers to communication, builds mutual trust, and promotes a better comprehension of market dynamics and consumer preferences

[12]

. Because they can successfully negotiate cultural nuances and modify their marketing tactics accordingly, businesses operating in culturally and linguistically similar areas frequently enjoy greater export success

[34]

For instance, businesses from EU member states frequently profit from the close proximity of cultures and languages within the single market, which makes it relatively easy for them to increase their export activities

[16]

. Furthermore, Cultural and linguistic proximity plays a valuable and crucial role in promoting international collaborations and joint ventures, which can improve businesses' access to new markets and resources

[10, 86]

. Partners benefit from this closeness, which lowers transaction costs and the risks involved in cross-border business operations by fostering mutual trust and understanding

[42]

. Practically speaking, companies can deliberately locate their operations in areas that provide access to culturally similar markets by taking advantage of language and cultural proximity. In order to allow easier market access and expansion, this may entail focusing on regional clusters or economic blocs where common cultural and linguistic linkages exist

[81]

. By encouraging cross-cultural exchanges, language training programs, and cultural diplomacy projects, policymakers can also aid businesses looking to leverage their close proximity to other cultures and languages

[12]

. Policymakers can facilitate cross-border collaboration and export growth by cultivating a greater awareness and acceptance of cultural differences. Thus, closeness in terms of language and culture adds value to the strategic significance of location for export competitiveness. Through the identification and utilization of these proximity benefits, companies and policymakers can improve their competitiveness in the international market.

4.2. Best Practices Case Studies

Case Study 1: Toyota's choice to set up production facilities in Thailand is a powerful example of how location is strategically important for export competitiveness. Thanks to Thailand's business-friendly environment, easy access to major markets, and availability of trained labor, Toyota has been able to maintain high standards of quality while producing cars at low prices

[81]

. Case Study 2: The strategic importance of location for export competitiveness is demonstrated by Samsung's choice to put electronics manufacturing facilities in Vietnam. Samsung's capacity to manufacture and export electronic items worldwide has been aided by Vietnam's strategic position, favorable labor prices, and investment incentives

[66]

. Case Study 3: A strong illustration of utilizing location for export competitiveness is the rise of Costa Rica as a center for the production of medical devices. The nation's trained workforce, close proximity to important markets like the US, and stable political climate have drawn multinational corporations and facilitated the expansion of the medical device sector

[56]

. Case Study 4: The seafood business in Norway serves as an example of how geographic advantages boost agricultural export competitiveness. Norway is a top exporter of premium seafood items to foreign markets thanks to its vast coastline, immaculate waterways, and ethical fishing methods

[2]

. Case Study 5: The growing textile and apparel manufacturing industry in Ethiopia is a prime example of the strategic significance of location for export competitiveness in developing economies. The nation's favorable trade agreements, large labor pool, and easy access to important markets have drawn foreign investment and enabled the textile industry to grow

[84]

. Case Study 6: Singapore has become a global hub for logistics due to its advantageous location at the intersection of several important shipping lanes. Due to its top-notch port infrastructure, effective customs processes, and business-friendly laws, Singapore has become a more competitive exporter in the area as a result of the establishment of distribution centers by international firms

[85]

. Case Study 7: The Italian luxury fashion business is a prime example of how legacy and location enhance export competitiveness. Italian fashion businesses are concentrated in places like Milan and Florence. These cities provide them with access to high-quality materials, talented artisans, and a rich cultural past that allow them to command premium prices and maintain a competitive edge in global markets

[74]

. Case Study 8: The strategic significance of location for export competitiveness in the natural resources sector is exemplified by Australia's mining industry. Australia is a significant exporter of commodities like iron ore, coal, and gold due to its vast mineral reserves, cutting-edge mining techniques, and close proximity to expanding Asian markets

[47]

. Case Study 9: The entertainment industry in South Korea, specifically the K-Pop sector, serves as an example of how cultural proximity affects export competitiveness. South Korean entertainment enterprises are based mostly in Seoul and use the nation's exports of music, movies, and television dramas to break into other markets. This highlights the strategic significance of location for the cultural industries

[69]

. Case Study 10: The aerospace sector in Canada serves as an example of how location-specific benefits boost advanced manufacturing export competitiveness. With a concentration in regions like Quebec and Ontario, Canadian aerospace companies can produce and sell aerospace goods and services worldwide because to easy access to trained labor, government assistance, and research facilities

[79]

5. Discussion

Empirical evidence from a variety of industries has demonstrated the strategic significance of location for export competitiveness. Factors such as market accessibility, effective transportation networks, availability of trained workforce, and advantageous regulatory frameworks are significant factors that impact businesses' choices about where to locate their operations

[87]

. Research has underscored the importance of location-specific advantages in augmenting enterprises' competitive standing in international marketplaces. For instance, businesses can strategically take use of location advantages to boost market access, cut costs, and optimize supply chains

[80]

. This is consistent with theories like the Resource-Based View and Porter's Diamond Model, which highlight the significance of location-specific elements in determining businesses' competitive strategies

[80]

. According to recent research, companies can improve their export competitiveness by coordinating their activities with advantageous location circumstances. For example, businesses can systematically assess location-specific aspects and choose the best sites for their activities by investing in sophisticated location analysis tools and analytics

[12]

. Additionally, cooperation between companies, academic institutions, and governmental bodies promotes knowledge exchange and creative location plans, which strengthens organizations' competitive positions

[34]

. Additionally, policymakers are essential in fostering an atmosphere that allows enterprises to prosper. According to a study, improving export competitiveness requires spending on infrastructure, changing regulations, and encouraging entrepreneurship and innovation

[17]

. By aligning their policies with broader economic goals and fostering collaboration with the private sector, policymakers can contribute to sustainable economic growth and competitiveness in export markets. Therefore, recent evidence highlights the critical importance of strategic location decisions for firms' export competitiveness. By leveraging location-specific advantages and aligning their operations with broader economic objectives, businesses and policymakers can enhance their competitive positions in the global marketplace.

5.1. Theoretical Contribution

Numerous theoretical ramifications about the strategic significance of location for export competitiveness are revealed by the literature. First, according to Porter's Diamond Model, four linked factors—factor circumstances, demand conditions, related and supporting industries, and company strategy, structure, and rivalry—influence a business's ability to compete in a given industry

[72]

. This model highlights how a firm's competitive advantage in export markets is shaped by location-specific advantages such trained workforce, supportive institutions, and infrastructure. Furthermore, according to Resource-Based View (RBV) of the Firm, firms can attain a sustained competitive advantage by utilizing valuable and distinctive resources, such as assets specific to a particular place

[8]

. This view holds that companies are better positioned to compete in export markets if they strategically take use of location advantages, such as easy access to essential supplies or close proximity to markets.

5.2. Practical Implication

Practically speaking, the literature provides a number of insights for companies looking to improve their export competitiveness by choosing key locations. First, companies can evaluate the feasibility of various locations based on elements like market access, transportation infrastructure, and regulatory environment by using location analysis tools like Geographic Information Systems

[24]

. Businesses can determine the best sites for production facilities, distribution hubs, and other operations by methodically assessing these variables. Additionally, the literature highlights the significance of matching location selections with more general corporate objectives and competitive tactics. For instance, companies may decide to put their manufacturing plants near large markets to cut down on lead times and transportation costs, or in nations with cheaper labor rates to cut production costs

[50]

5.3. Future Research Direction

The question of location's strategic significance in determining export competitiveness is complex and involves multiple disciplines, such as international business, economics, geography, and trade policy. Research in this area is desperately needed given the changing dynamics of global trade, technological breakthroughs, and geopolitical shifts. In addition to synthesizing the body of knowledge already known, a thorough literature evaluation on this subject should suggest future research directions based on knowledge gaps. Future directions for study must concentrate on.

5.3.1. Impact of Technological Advancements on Location-Based Export Competitiveness

One of the biggest shifts in the dynamics of international trade is the speed at which technology is developing, especially in the areas of production, logistics, and communication. Future studies ought to examine how these developments are changing the conventional significance of geographic location. For example, the importance of being close to resources and markets may be lessening with the growth of e-commerce, digital trade, and just-in-time manufacturing, enabling previously underprivileged areas to compete more successfully.

5.3.2. Geopolitical Shifts and Their Influence on Location-Based Comparative Advantage

Trade routes, alliances, and economic policies are all significantly impacted by the constantly changing global geopolitical landscape. The strategic significance of location for export competitiveness should be studied in relation to changes in geopolitical power, such as the emergence of China, the Belt and Road Initiative, or regional trade agreements.

5.3.3. Sustainability and Environmental Considerations in Location-Based Export Strategies

There is a need to look into how sustainability and environmental protection are affecting the strategic significance of location, as these issues are becoming more and more important on a worldwide scale. This line of inquiry could examine the ways in which export competitiveness is impacted by environmental laws, carbon footprint considerations, and the need for sustainable supply chains in various geographic areas.

5.3.4. Impact of Demographics and Urbanization on Location-Based Export Competitiveness

A location's ability to compete internationally is greatly influenced by changes in the labor market, urbanization, and population. Studies in this field should look at how these variables interact with a place's location to affect export plans and results.

5.3.5. Comparative Analysis of Landlocked vs. Coastal Nation

A comparative review of the ways in which landlocked countries can devise tactics to surmount their geographical limits is necessary, given the inherent difficulties these nations confront. Study should look at successful cases of landlocked countries that have improved their export competitiveness and pinpoint the elements that made those countries successful.

5.4. Conclusion

The phenomenon of location's strategic significance for export competitiveness is complex and influenced by multiple factors, such as accessibility to markets, transportation networks, nearby cultures and languages, and regulatory frameworks. This study offers a thorough analysis of the major factors and consequences related to location decisions in international trade, drawing on findings from current research in reliable databases. Porter’s Diamond Model and the Resource-Based View are two theoretical frameworks that have shed light on how location-specific advantages influence enterprises' competitive strategies. From a practical standpoint, companies can improve their export competitiveness by placing their operations in strategically advantageous locations, coordinating their strategies with overarching business goals, and taking advantage of proximity in terms of language and culture to enable easier market entry and expansion.

By investing in infrastructure, encouraging innovation, and facilitating cross-cultural contacts, policymakers can also significantly contribute to the development of a favorable business environment. To further improve firms' competitive advantages in the global marketplace, collaboration between businesses, research institutions, and government agencies is crucial for promoting information sharing and innovation in location strategies. In summary, firms and policymakers must effectively negotiate the intricacies of the global economy by appreciating and utilizing the strategic significance of location for export competitiveness. Through the identification and utilization of site-specific advantages, companies can improve their competitive standing and facilitate long-term economic expansion.

5.5. Recommendation

Several suggestions for firms and policymakers to increase the strategic significance of location for export competitiveness can be made based on the literature's findings. First, in order to increase the connectedness and accessibility of key places, authorities should fund the construction of infrastructure, which includes utilities, telecommunications, and transportation networks

[35]

. This entails modernizing the rail, road, and port infrastructure to ease the flow of cargo and lessen logistical bottlenecks. Second, to encourage enterprises to locate their operations in strategic places and draw in foreign direct investment (FDI), authorities can put supportive regulations and incentives in place

[10]

. The implementation of tax incentives, subsidies, and expedited regulatory procedures can mitigate the expenses and hazards linked to starting and running enterprises in industries focused on exports. In summary, the multidimensional phenomena of the strategic significance of location for export competitiveness has important theoretical and practical ramifications. Through a comprehensive comprehension of the theoretical frameworks, practical concerns, and policy proposals discussed in this discussion, decision-makers in business and government can increase their competitiveness in international marketplaces.

Abbreviations

FDI	Foreign Direct Investment
PRISMA	Preferred Reporting Items for Systematic Reviews and Meta-Analyses
RBV	Resource-Based View
SME	Small and Medium-sized Businesses

Acknowledgments

The authors acknowledge Jimma University, college of Business and Economics for providing electronics support, and Nugussie Tesfaye for funding the work.

Author Contributions

Teshome Bekele Nege: Conceptualization, Resources, Data curation, Formal Analysis, Investigation, Visualization, Methodology, Writing – original draft, Project administration, Writing – review & editing

Mekonnen Bogale Abegaz: Conceptualization, Data curation, Supervision, Validation, Visualization, Project administration

Funding

This work is supported by individual person Nigussie Tesfaye.

Data Availability Statement

The data is available from the corresponding author upon reasonable request.

Conflicts of Interest

The authors declare no conflicts of interest.

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Nege, T. B., Abegaz, M. B. (2024). Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review. American Journal of Theoretical and Applied Business, 10(2), 33-46. https://doi.org/10.11648/j.ajtab.20241002.12

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Nege, T. B.; Abegaz, M. B. Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review. Am. J. Theor. Appl. Bus. 2024, 10(2), 33-46. doi: 10.11648/j.ajtab.20241002.12

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Nege TB, Abegaz MB. Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review. Am J Theor Appl Bus. 2024;10(2):33-46. doi: 10.11648/j.ajtab.20241002.12

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@article{10.11648/j.ajtab.20241002.12,
  author = {Teshome Bekele Nege and Mekonnen Bogale Abegaz},
  title = {Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review
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  journal = {American Journal of Theoretical and Applied Business},
  volume = {10},
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  doi = {10.11648/j.ajtab.20241002.12},
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  abstract = {This comprehensive assessment of the literature looks at the strategic significance of location for export competitiveness. In order to provide a nuanced understanding of how geographic location affects firms' ability to compete in export competitiveness, the review synthesizes key findings and insights from a thorough analysis of 71 scholarly articles from reliable databases, including Scopus, Web of Science, JSTOR, Science Direct, PubMed, DOAJ, and IEEE Xplore. A number of criteria are identified and categorized in the evaluation, including market accessibility, established trade routes and infrastructure, availability of resources, capital, and inputs, institutional support, trade agreements, economic integration, and regulatory framework. Important factors that affect export competitiveness include the innovation environment, industry clusters, the agglomeration effect, the availability of skilled workers, and proximity in terms of language and culture. The case study on best practices has been delivered. Moreover, it highlights gaps in the literature and offers insightful information for new lines of inquiry. This review provides a comprehensive understanding of the strategic significance of geography in influencing enterprises' export plans and performance in the global marketplace by combining empirical data with theoretical frameworks. The review's conclusions broaden our theoretical and practical understanding of how firms' location decisions are influenced by location, which helps managers run their businesses profitably.
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 year = {2024}
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Teshome Bekele Nege

Department of Management, College of Business and Economics (BECO), Jimma University, Jimma, Ethiopia

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http://orcid.org/0009-0001-3940-3064
Mekonnen Bogale Abegaz

Department of Management, College of Business and Economics (BECO), Jimma University, Jimma, Ethiopia

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Nege, T. B., Abegaz, M. B. (2024). Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review. American Journal of Theoretical and Applied Business, 10(2), 33-46. https://doi.org/10.11648/j.ajtab.20241002.12

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ACS Style

Nege, T. B.; Abegaz, M. B. Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review. Am. J. Theor. Appl. Bus. 2024, 10(2), 33-46. doi: 10.11648/j.ajtab.20241002.12

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AMA Style

Nege TB, Abegaz MB. Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review. Am J Theor Appl Bus. 2024;10(2):33-46. doi: 10.11648/j.ajtab.20241002.12

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@article{10.11648/j.ajtab.20241002.12,
  author = {Teshome Bekele Nege and Mekonnen Bogale Abegaz},
  title = {Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review
},
  journal = {American Journal of Theoretical and Applied Business},
  volume = {10},
  number = {2},
  pages = {33-46},
  doi = {10.11648/j.ajtab.20241002.12},
  url = {https://doi.org/10.11648/j.ajtab.20241002.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20241002.12},
  abstract = {This comprehensive assessment of the literature looks at the strategic significance of location for export competitiveness. In order to provide a nuanced understanding of how geographic location affects firms' ability to compete in export competitiveness, the review synthesizes key findings and insights from a thorough analysis of 71 scholarly articles from reliable databases, including Scopus, Web of Science, JSTOR, Science Direct, PubMed, DOAJ, and IEEE Xplore. A number of criteria are identified and categorized in the evaluation, including market accessibility, established trade routes and infrastructure, availability of resources, capital, and inputs, institutional support, trade agreements, economic integration, and regulatory framework. Important factors that affect export competitiveness include the innovation environment, industry clusters, the agglomeration effect, the availability of skilled workers, and proximity in terms of language and culture. The case study on best practices has been delivered. Moreover, it highlights gaps in the literature and offers insightful information for new lines of inquiry. This review provides a comprehensive understanding of the strategic significance of geography in influencing enterprises' export plans and performance in the global marketplace by combining empirical data with theoretical frameworks. The review's conclusions broaden our theoretical and practical understanding of how firms' location decisions are influenced by location, which helps managers run their businesses profitably.
},
 year = {2024}
}

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TY  - JOUR
T1  - Strategic Importance of Location for Export Competitiveness: A Systematic Literature Review

AU  - Teshome Bekele Nege
AU  - Mekonnen Bogale Abegaz
Y1  - 2024/09/26
PY  - 2024
N1  - https://doi.org/10.11648/j.ajtab.20241002.12
DO  - 10.11648/j.ajtab.20241002.12
T2  - American Journal of Theoretical and Applied Business
JF  - American Journal of Theoretical and Applied Business
JO  - American Journal of Theoretical and Applied Business
SP  - 33
EP  - 46
PB  - Science Publishing Group
SN  - 2469-7842
UR  - https://doi.org/10.11648/j.ajtab.20241002.12
AB  - This comprehensive assessment of the literature looks at the strategic significance of location for export competitiveness. In order to provide a nuanced understanding of how geographic location affects firms' ability to compete in export competitiveness, the review synthesizes key findings and insights from a thorough analysis of 71 scholarly articles from reliable databases, including Scopus, Web of Science, JSTOR, Science Direct, PubMed, DOAJ, and IEEE Xplore. A number of criteria are identified and categorized in the evaluation, including market accessibility, established trade routes and infrastructure, availability of resources, capital, and inputs, institutional support, trade agreements, economic integration, and regulatory framework. Important factors that affect export competitiveness include the innovation environment, industry clusters, the agglomeration effect, the availability of skilled workers, and proximity in terms of language and culture. The case study on best practices has been delivered. Moreover, it highlights gaps in the literature and offers insightful information for new lines of inquiry. This review provides a comprehensive understanding of the strategic significance of geography in influencing enterprises' export plans and performance in the global marketplace by combining empirical data with theoretical frameworks. The review's conclusions broaden our theoretical and practical understanding of how firms' location decisions are influenced by location, which helps managers run their businesses profitably.

VL  - 10
IS  - 2
ER  -

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