The Determinants of Exporting Firms and Their Impact on Profitability: A Case Study of Industrial Estate Hayatabad, Khyber Pakhtunkhwa

Abstract

This research aims at exploring the relationship between production efficiency and adoption of technology and export competitiveness and profitability of the manufacturing firms within the Hayatabad Industrial Estate (HIE), Khyber Pakhtunkhwa, Pakistan and use as a quantitative descriptive survey design that utilizes primary data measures in the form of designed questionnaires capturing lean manufacturing practices, level of technology adoption, export performance, and profitability measures across the manufacturing firms to the key decision-makers of the firms comprising of owners, CEOs, general managers, and production managers and using descriptive statistics to analyse prevalence Findings indicate that 54-percent of HIE company are highly productive (high production efficiency through lean production and waste reduction) but only 41 percent are highly-technological-adoption (high production with ERP systems, automation and Industry 4.0 tools) with high-efficiency companies attaining a cost-competitiveness and profitability in the short-term and high-technological-adoption firms securing long-term export business and sustainable financial performance, and the 13-percentage-point efficacy-technology disconnect in which most firms are maximizing existing The findings are used to inform the implementation of the Khyber Pakhtunkhwa Industrial Policy 20202030, with the emphasis on firm-level institutionalization of continuous improvement associated with the investment in technologies, the facilitation by the government of the access to Export Import Bank Long-Term Financing Facility, the Shared Technology Hubs led by the industry associations, the systematic efficiency-technology capabilities building instead of individual interventions, and this study contributes to the first systematic empirical evaluation of the HIE operational capabilities, the extension of the Resource based View and Dynamic Capabilities.

Keywords: export competitiveness, dynamic capabilities, Hayatabad Industrial Estate, lean manufacturing, production efficiency, Resource-Based View, technology adoption.