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Impact of Business Association Services and Training Programs On Export Performance: Evidence From Bangladesh IT and ITES Sector Sophie Brown
Impact of Business Association Services and Training Programs On Export Performance: Evidence From Bangladesh IT and ITES Sector Sophie Brown
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BestMasters
Sophie Brown
Impact of Business
Association Services
and Training Programs
on Export Performance
Evidence from Bangladesh IT and
ITES Sector
BestMasters
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Impact of Business
Association Services
and Training Programs
on Export Performance
Evidence from Bangladesh IT and
ITES Sector
Sophie Brown
Etoy, Switzerland
This Springer Gabler imprint is published by the registered company Springer Fachmedien Wiesbaden
GmbH part of Springer Nature.
The registered company address is: Abraham-Lincoln-Str. 46, 65189 Wiesbaden, Germany
Abstract
This thesis analyzes the impact of the Bangladesh IT association (BASIS)
on firm export performance, using unique cross-sectional data from the
Bangladesh Evaluation Survey 2016. The aim is to build on existing
literature and provide empirical insight into the effect of an export
association in a developing country in the IT and ITES sector. The
hypotheses that BASIS services and training programs positively impact
firm export performance, defined as export propensity and export share,
are empirically tested using the propensity score matching method. The
empirical methodology was chosen to address the self-selection bias. The
results show a positive link between BASIS and firm export performance.
However, the empirical evidence, from the available data, is not robust
enough to claim a clear causal relationship for all services and training
programs offered. Nevertheless, several insights can be made: The
services, such as financial services seem to favor an expansion of firms’
export share while training programs, such as the marketing and technical
training are associated with an increase of export propensity.
V
Table of Contents
Abstract.......................................................................................... V
Table of Contents ........................................................................ VII
List of Tables and Figures ............................................................ IX
Acronyms.................................................................................... XIII
1 Introduction .................................................................................. 1
2 Literature Review......................................................................... 5
2.1 Determinants of Export Performance .................................... 5
2.2 The Role of Export Promotion Agencies ............................... 9
3 BASIS and Research Hypothesis .............................................. 13
4 Data Characteristics .................................................................. 19
4.1 Survey Characteristics ........................................................ 19
4.2 Descriptive Data.................................................................. 19
4.2.1 Explanatory Variables .................................................. 19
4.2.2 Outcome Variables ....................................................... 25
4.2.3 Control and Matching Variables ................................... 25
5 Empirical Design........................................................................ 29
5.1 Ordinary Least Squares ...................................................... 29
5.2 Potential Methods ............................................................... 32
5.3 Matching Method ................................................................ 34
5.3.1 Basic Model and Quantities of Interest ......................... 34
5.3.2 Assumptions ................................................................. 36
5.3.3 Propensity Score Matching Method ............................. 37
6 Results....................................................................................... 49
6.1 Impact on Export Propensity ............................................... 49
6.2 Impact on Export Share ...................................................... 51
6.3 Discussion........................................................................... 53
7 Limitations ................................................................................. 55
8 Conclusion ................................................................................. 57
Bibliography .................................................................................. 59
VII
List of Internet Resources............................................................. 65
Appendices ................................................................................... 67
A. Services and Training Awareness and Usage Ratio ...... 67
B. Detailed Summary Statistics .......................................... 70
C. Overview Propensity Score Estimation Steps ................ 73
D. χ2 test............................................................................. 74
E. Detailed Overview of Results - Export Propensity ......... 75
F. Detailed Overview of Results - Export Share ................. 77
G. Robustness Check ......................................................... 79
Acknowledgements ...................................................................... 85
VIII
List of Tables and Figures
Figure 4.1: Reasons for not Participating in BASIS Training
Programs ................................................................... 20
Table 4.1: Training participation Rate by Exporter Status ........... 20
Figure 4.2: BASIS Training Participation ...................................... 21
Table 4.2: Usefulness Perception of Training Programs ............. 22
Table 4.3: Service Awareness, Usage Ratio and Satisfaction
Rate ........................................................................... 23
Table 4.4: Classification of BASIS Services ................................ 24
Table 4.5: Coraviate Mean by Export Status ............................... 27
Table 5.2: Normalized Difference Between Control and Treatment
Groups for each Covariate ......................................... 32
Figure 5.1: Overlap of Propensity Score for each Treatment ....... 40
Table 6.1: Treatment Effect of Training Programs on Export
Propensity .................................................................. 50
Table 6.2: Treatment Effect of Services on Export Propensity .... 50
Table 6.3: Treatment Effect of Training Programs on Export
Share ......................................................................... 52
Table 6.4: Treatment Effect of Services on Export Share ........... 52
Table A.1: Service Awareness, Usage Ratio and Satisfaction Rate
Index for Exporter Firms ............................................ 68
Table A.2: Service Awareness, Usage Ratio and Satisfaction Rate
for Non-Exporter Firms .............................................. 69
Table B.1: Covariates Summary Statistics with Treatment
Training ...................................................................... 70
Table B.2: Covariates Summary Statistics with Treatment
Marketing Training ..................................................... 70
IX
Table B.3: Covariates Summary Statistics with Treatment
Management Training ................................................ 70
Table B.4: Covariates Summary Statistics with Treatment
Technical Training ...................................................... 71
Table B.5: Covariates Summary Statistics with Treatment
Executive Training ..................................................... 71
Table B.6: Covariates Summary Statistics with Treatment
Services ..................................................................... 71
Table B.7: Covariates Summary Statistics with Treatment
Financial Services ...................................................... 71
Table B.8: Covariates Summary Statistics with Treatment
Promotion Services .................................................... 72
Table B.9: Covariates Summary Statistics with Treatment Network
Services ..................................................................... 72
Table B.10: Covariates Summary Statistics with Treatment Other
Services ..................................................................... 72
Table E.1: Detailed Overview of Treatment Effect of Training
Programs on Export Propensity ................................. 75
Table E.2: Detailed Overview of Treatment Effect of Services on
Export Propensity ....................................................... 76
Table F.1: Detailed Overview of Treatment Effect of Training
Programs on Export Share ........................................ 77
Table F.2: Detailed Overview of Treatment Effect of Services on
Export Share .............................................................. 78
Table G.1: Alternative Classification of BASIS Services ............. 79
Table G.2: Treatment Effects of Alternative Services Indices on
Export Propensity ....................................................... 80
X
Table G.3: Treatment Effects of Alternative Services Indices on
Export Share .............................................................. 80
Table G.4: Treatment Effect of Training Programs on Number of
Export Markets ........................................................... 81
Table G.5: Treatment Effect of Services on Number of Export
Markets ...................................................................... 82
Table G.6: Linear Regression of the Impact of BASIS Training and
Services ..................................................................... 84
XI
Acronyms
ATE Average Treatment Effect
ATET Average Treatment Effect of the Treated
EPA Export Promotion Agency
BASIS Bangladesh Association of Software and Information
Services
BDT Bangladeshi taka, currency of the people’s republic of
Bangladesh
GNI Gross National Income
NTF III Netherlands Trust Fund phase III
OLS Ordinary Least Squares
ICT Information and Communication Technology
IT Information Technology
ITC International Trade Center
ITES Information Technology Enabled Services
IV Instrument Variable
PMP Project Management Professional
R&D Research and Development
SQL Structured Query Language
SME Small and medium-sized enterprise
TPO Trade Promotion Organization
XIII
1 Introduction
The relationship between exports and economic growth has attracted
much attention in recent decades. Neo-classical theory, strengthened by
the Asian Tigers and the general success of the free-market, suggests that
exporting leads to growth (Sampathkumar and Rajeshkumar, 2016, p. 33).
Three main arguments support the export-led growth theory. The first dates
back to David Ricardo, who put forward the benefits of specialization and
comparative advantage. By focusing on the industries which present a
comparative advantage and by importing the other goods, countries will
end up with a higher total amount of goods than if they produced everything
themselves (Ricardo, 2004, p. 83). The second argument emphasizes the
advantages of economies of scale. Through exports a firm is not
constrained by country-markets and can produce to the maximum of its
capacity (Krugman, 1979, p. 479). The final argument relates to technology
change. Firms learn from foreign markets, improve their production
methods and update their technologies through exports. Inefficiencies are
eliminated to be able to compete in fierce global markets (Rivera-Batiz and
Romer, 1991, p. 536-537).
Thus, international trade has been largely promoted (Alvarez and Crespi,
2000, p. 226; Bond et al., 2005, p. 15). Consequently, governments have
been pouring their resources into export promotion programs as the
continuing existence of trade barriers inhibits exporting. The complexities
of administrative procedures and compliance requirements, asymmetric
information, missing links to foreign clients, and the lack of experience or
resources are some of the obstacles that discourage local companies from
seeking expansion through foreign markets. Trade promotion agencies,
which are often part of the government export promotion programs, aim to
reduce these barriers.
The International Trade Center (ITC) was founded with the mission to help
countries foster international trade. As a subdivision of the United Nations
and the World Trade Organization, ITC builds the bridge between
developing countries and the global economy and promotes trade as a
means for economic growth.
1
© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020
S. Brown, Impact of Business Association Services and Training
Programs on Export Performance, BestMasters,
https://doi.org/10.1007/978-3-658-30467-6_1
One of ITC’s key projects –the Netherlands Trust Fund phase III (NTF III)
program– is conducted in partnership with the Dutch Centre for the
Promotion of Imports from developing countries and aims to improve
export competitiveness in key sectors of four developing countries,
Bangladesh, Kenya, Myanmar and Uganda. The aim of the program is to
ensure that the beneficiary sectors increase their export sales and/or
volumes as well as secure new clients and markets in order to reach the
program’s overarching mission: Generate and maintain jobs in the selected
sectors and ultimately reduce poverty (ITC, 2017). NTF III provides a
framework for helping to improve the capacities and performance of trade
support agencies, which in turn provide services to export-oriented
enterprises. By building the capabilities of export promotion agencies, ITC
helps to foster economic growth in a sustainable manner (Pamuk et al.,
2015, p. 4).
In Bangladesh, the focus of NTF III is on the IT and IT Enabled Services
(ITES) sectors. The Bangladesh Association of Software and Information
Services (BASIS) is the primary IT export promotion agency, which helps
SMEs connect to foreign markets and promotes entrepreneurship. NTF III
aims to improve the services offered by BASIS to better support the local
SMEs in increasing their export competitiveness (Pamuk et al., 2015, p. 4).
Through this Master’s thesis I aim to assess the existing impact of the
export promotion agency, BASIS, on Bangladeshi IT and ITES firms.
Currently, empirical research on the effectiveness of export promotion
agencies is inconclusive (Ayob and Freixanet, 2014, p. 38). Due to the
different methodologies used in studies and the different sectors and
countries investigated, it is difficult to generalize findings. This study
therefore complements existing research by investigating the IT and ITES
sector in a developing country. Furthermore, I go further than most
empirical literature by evaluating the impact of the individual training
programs and the cluster of services offered by BASIS on export
performance, measured as export propensity and export share. In order to
statistically test the impact on Bangladeshi firms, I apply the propensity
score matching method. This method was chosen primarily to reduce the
self-selection bias present with non-experimental data.
2
The thesis is structured as follows: Chapter 2 provides a literature review
of the determinants of export performance and the role of export promotion
agencies. Chapter 3 introduces the government trade promotion agency,
BASIS and the two research hypotheses. In chapter 4 the dataset is
described. Chapter 5 presents the econometric methods used to test the
research hypotheses. Section 5.1 presents the OLS method and its
limitations, section 5.2 briefly describes potential methodologies to account
for self-selection and section 5.3 describes the matching method applied.
The results and implications are shown in chapter 6. Chapter 7 highlights
the limitations and chapter 8 concludes.
3
2 Literature Review
In the first section of this chapter, I give an overview of the determinants of
export performance. I investigate the internal characteristics of firms to
determine which of these characteristics distinguish exporters from non-
exporters on a theoretical level. The findings are used to determine the
covariates to include in the econometric design. In the second section I
summarize the role of export promotion agencies and the current findings
from research on their impact on firm export performance.
5
© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020
S. Brown, Impact of Business Association Services and Training
Programs on Export Performance, BestMasters,
https://doi.org/10.1007/978-3-658-30467-6_2
Williams, 2011, p. 155; Rentala et al., 2014, p. 4; Beleska-Spasova, 2014,
p. 66). The theory suggests that the resources a firm possesses can
provide a competitive advantage. The bigger the stock of resources the
better the performance and the better endowed a firm is to enter new
markets (Wernerfelt, 1984, p. 173-174; Barney, 1991, p. 101). The
Resources can be defined as tangible or intangible elements owned and
controlled by a firm. Human capital (employment, skilled labor and
management characteristics), physical capital (machinery) and financial
assets are tangible while knowledge as well as brands are intangible
assets (Wernerfelt, 1984, p. 172).
Several of these resources have been studied in the literature as
determinants of export performance. Among them are firm size, firm age,
productivity, R&D competencies, technological capabilities, financial ratios,
international experience and orientation of managers, management
perception, foreign ownership and training undergone by employees.
However, due to the many different methodological approaches and the
varying measures of export performance, the literature is inconclusive as
to the impact of each determinant (Baldauf et al., 2000, p. 62). The most
important determinants, according to economic theory and literature, are
discussed in detail below and justified in line with the resource-based
theory.
Firm size
Often captured as the number of employees, the firm size can be used as
a proxy for resources, to reflect the ability a firm has to export (Williams,
2011, p. 157). The resources-based theory suggests that larger firms are
more capable of exporting. They possess various managerial and financial
advantages as well as better production capacity (Baldauf et al., 2000, 65).
Firstly, larger firms tend to have more employees and management with
specialized skills. Williams (2011) states “if a firm has a large number of
employees, it will have access to a wider pool of human capital resources
and should, therefore, be better able to design effective competitive
strategies” (p. 155). Secondly, larger firms can take advantage of
economies of scale and benefit from purchasing in bulk, lowering their
costs (Wagner, 1995, p. 33; Sarpong and Wolf, 2008, p. 17). Finally, larger
6
firms usually have more financial resources, thus can invest more in
research and development and pay the fixed costs associated with exports
such as establishing an export department, creating export marketing
material, conducting market analysis, obtaining certificates, etc. (Dijk,
2002, p. 4). Subsequently, larger companies are more capable of
withstanding the financial risk of entering new markets (Wagner, 1995, p.
33; Williams, 2011, p. 157). There are limits, however, to the theoretical
positive effect of firm size. As coordination costs increase, further
expansion may cease to be profitable (Sterlacchini, 2001, p. 451; Dijk,
2002, p. 4).
The findings of empirical research regarding the impact of firm size are
rather consistent. Analyzing various markets and countries, most studies
find a significant and positive impact of firm size on export (Sarpong and
Wolf, 2008, p. 9; Dijk, 2002, p. 15; Williams, 2011, p. 166; Fakih and
Ghazalian, 2014, p. 687; Rentala et al., 2014, p. 15; Alvarez, 2007, p. 384).
Nevertheless, there are studies (Duenas-Caparas, 2007, p. 93), which do
not find a significant impact (see Freixanet, 2012 p. 1073; Baldauf et al.,
2000, p. 62).
Firm age
The second most researched characteristic is the age of a firm. The
resource-based theory indicates that with more experience and know-how,
firms are better equipped to enter international markets (Williams, 2011, p.
158). Younger firms lack the accumulated experience that older
counterparts have gathered over time. They may be less well prepared to
deal with challenges and consequently are less willing to take the risk of
exporting. Addressing the value of know-how, Johnson and Vahlne (1977)
highlight the distinction between objective knowledge that can be taught
and experiential knowledge that is gained through individual experience
alone. They emphasize that internationalization is a gradual process of
acquisition and incorporation of knowledge and skills. Such experiential
knowledge is vital and can only be acquired with time (p. 28).
In contrast, there exists a tendency of “born global businesses”, which
suggests that new firms are more likely to export directly, rendering the
age an inconclusive variable for export prediction (Brush et al., 2002, p. 2;
7
Freixanet, 2012, p. 1073). Younger firms may have a lower risk perception
and be more flexible in dealing with challenges (Dijk, 2002, p. 10). Younger
firms with more flexible structures may also be more capable of
assimilating foreign knowledge (Autio et al., 2000, p. 913).
The impact of age found in empirical studies is inconclusive (Dijk, 2002, p.
10). Few researchers find a positive and significant impact suggesting that
older firms are more likely to export (Fakih and Ghazalian, 2014, p. 679).
Most studies find no significant impact of firm age (Williams, 2011, p. 169;
Sarpong and Wolf, 2008, p. 26; Duenas-Caparas, 2007, p. 93). While
Westhead et al. (2004) find significant estimates for younger firms (p. 512).
These results suggest that the impact might be country and industry
specific.
International experience
The resource-based theory suggests that international orientation,
knowledge and skill of managers or foreign owners are a driving force in
the internationalization of a firm through exports (Shamsuddoha and Ali,
2006, p. 95). Studying abroad, international work or travel experience
endows managers with network opportunities. The network and previous
international experience can provide essential insights into the workings of
foreign markets such as business practices, customs procedures and
peculiar challenges. Additionally, they can facilitate contact and
communication with foreign markets. Finally, they reduce uncertainty and
improve management perception of the potential of foreign markets
(Williams, 2011, p. 160).
The empirical literature supports the theory with most studies finding a
positive and significant impact of international experience and foreign
ownership on the export performance of firms (Dijk, 2002, p. 13; Williams,
2011, p. 165; Fakih and Ghazalian, 2014, p. 678; Duenas-Caparas, 2007,
p. 104; Filatotchev et al., 2008, p. 1008).
Productivity
Productivity is defined as a measure of production efficiency and the theory
suggests that highly productive firms are more likely to enter and survive
in foreign markets. The idea is that, as international markets tend to be
8
fierce, more efficient firms will be more willing to compete (Alvarez, 2007,
p. 377). Although this self-selection phenomenon creates an initial
difference in productivity between exporters and non-exporters, the
learning-by-exporting theory suggests that subsequent increase in the
productivity of exporters is caused by the benefits of exporting (Aw et al.,
2007, p. 83-84; Sarpong and Wolf, 2008, p. 18).
The bidirectional relationship of productivity and export performance make
a clear analysis difficult, and the empirical findings of productivity as a
determinant of export performance are inconclusive. Alvarez (2007) finds
a positive impact of productivity on export performance and stresses the
importance of increasing productivity to increase export success (p. 390),
while Bernard and Jensen (2004) find no significant impact (p. 16).
Filatotchev et al. (2008), who analyze the export performance of high
technology SMEs in emerging markets, suggests that the impact of firm
performance might be country and industry specific (p. 1007).
10
can be provided. Additionally, certain studies examine the overall impact
of EPAs without distinguishing each individual service or training offered
(Genctürk and Kotabe, 2001, p. 58, Ayob and Freixanet 2014, p. 39;
Olarreaga and Lederman, 2010). Other studies have focused on the
impact of specific programs such as sponsored foreign trade shows, trade
missions, seminars for potential exporters, foreign trade offices, export
financing, sales leads, market analysis and information programs
(Freixanet, 2012, p. 1066; Wilkinson and Brouthers, 2006, p. 242;
Olarreaga and Lederman, 2010, p. 2).
Differing results may arise because of a discrepancy in the measurement
of export performance. Most studies measure export performance using
financial outcomes such as export sales, market share and export
profitability. This characterization only provides a limited view of the export
potential (Olarreaga and Lederman, 2010, p. 2). Due to the qualitative
nature of additional export benefits, only few studies address other export
goals such as knowledge about the export market or skill acquisition
(Durmusoglu, 2012, p. 685-686; Alvarez and Crespi, 2000, p. 230).
Durmusoglu et al. (2012) for example investigate both objective financial
outcomes and alternative export dimensions such as stakeholder
relationship, strategic achievement, organizational learning and find a
significant impact of export promotion services on all the outcomes
investigated (p. 685-686). Other researchers (Wilkinson and Brouthers
(2006); Volpe Martincus and Carballo (2008)) also find a positive and
significant effect of EPAs on the export performance of firms.
Previous research conducted in Bangladesh finds a positive and significant
impact of EPAs. Shamsuddoha and Ali (2006) investigate the direct and
indirect effects of EPAs on firm export performance in Bangladesh in three
industries: garment, leather and specialized textiles. The indirect effects
investigated are management perception of export market environments
and export commitment. Their findings support the theory that managers’
export knowledge and positive perception of the export market
environment is enhanced by the use of EPAs with the manager’s
commitment to export, export strategy and consequently their export
performance subsequently being increased (p. 103-105).
11
However, not all studies find a significant impact. The results from Alvarez
(2007), who studies the impact of EPAs in Chile, are inconclusive (p. 384).
He suggests that “export promotion policies may not be very successful if
they are not accompanied by complementary policies aimed to improve
firm characteristics, such as productivity” (p. 390). The government
programs that seek to increase exports through trade fairs, marketing and
foreign knowledge need to be accompanied by policies that help the
development of structural factors. Alvarez stresses that the “traditional
instruments are useful in reducing exporting entry costs, thus facilitating
the entry of new firms, but they may not be enough to sustain firm
competitiveness in foreign markets” (p. 390).
12
3 BASIS and Research Hypothesis
Bangladesh gained independence in 1972 and, although the country still
counts 47 million people living below the poverty line, it has shown a strong
economic performance in terms of growth and development in the last
years1. After following a socialist approach to economic policy in the 1970s,
the government introduced a series of de-regulation reforms and, under
the auspices of the World Bank and IMF, proceeded to trade liberalization
at the beginning of the 1990s (The World Bank, 2016). Despite its efforts,
however, Bangladesh still ranks among the lowest countries in the trade
openness indices (The World Bank, 2016) and is considered a relatively
closed economy2 (The Global Economy, 2016).
While still small in size, the IT and ITES sector has grown by 40% in the
last five years (Digital World 2016, 2016). The nation’s vision is to become
a technologically driven economy and it is a core focus of current Prime
Minister, Sheikh Hasina, who wants to increase Internet penetration
significantly by 2021 (Government of Bangladesh, 2017).
With the ambition to develop Bangladesh’s IT and ITES industry, the
government created the Bangladesh Association of Software and
Information Services (BASIS) in 1997. BASIS is “the national trade body
for Software and IT Enabled Service industry of Bangladesh” (BASIS,
2016) and is one of the seven offices of the Export Promotion Bureau, the
official trade promotion body of Bangladesh with the mandate to promote
and develop exports, investments and tourism (Trade Promotion
Organizations Directory, 2015, p. 57; Government of Bangladesh, 2017).
The association was founded with the mission to develop and industrialize
1
The economy has seen a yearly increase of its GDP by 6 percent on
average over the last ten years, resulting in the reduction of poverty in the
country by one third, and improving life expectancy and the literacy rate
(World Bank, 2016)
2
The export of goods and services as a percentage of GDP is currently at
18.99, with an average annual growth rate of 9.02 from 1961 to 2014.
Export to GDP rates below 15 percent are considered as closed economies
(see The Global Economy, 2016)
13
© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020
S. Brown, Impact of Business Association Services and Training
Programs on Export Performance, BestMasters,
https://doi.org/10.1007/978-3-658-30467-6_3
the software and IT services sector in Bangladesh. Over the past years,
BASIS has grown substantially, going from 17 to nearly 1000 member
firms. Together these members generate the majority of the total revenue
of the software and IT services sector in the country.
The organization has six specific goals to achieve its vision. The first goal
is to develop the domestic market by creating awareness and establishing
fair markets within the local software and the ITES industry. Secondly,
BASIS aims to develop the international market for local firms through
networking events and international branding of the Bangladesh IT
industry. The third goal is to build the capacity of member firms through
training programs and resource sharing. Fourth, BASIS offers its members
a variety of services in operational and business areas to improve firm
capabilities. The fifth goal is to work as advocates for the software and
ITES industry ensuring fair government policies directed at the healthy
growth and development of the sector. Finally, BASIS seeks social
contribution with a focus on the younger generation to become a
technology leader in the future (BASIS, 2016).
Although not all of BASIS’ offers are directly tailored to exports, the training
programs and services provide key resources that can be leveraged for the
firm’s international expansion. BASIS offers four training programs each
providing specific business skills: technical training, project management
training, export marketing plan training and executive level training. The
management and executive level training offer a PMP certificate3 and the
possibility of learning a variety of management skills in leading and
managing projects with timing, budget and resource constraints. These
training programs intend to increase firm productivity. Through an increase
in productivity a firm is more capable to compete in international markets.
The technical training program provides advice and skills in many different
IT areas including IOS Development, Java, software development, SQL,
design and many more. This training provides specific know-how, which
can be used as a competitive advantage in global markets. The export
3
Project Management Professional Certification, a world-wide recognized
certificate
14
marketing plan training provides knowledge of foreign markets and
marketing advice and helps firms improve communication with foreign
clients. As previously mentioned in the literature review, knowledge of
foreign markets is key in determining export success.
In addition to the training programs, BASIS provides the following services:
1. Advocacy for Software and ITES sector: BASIS presents a strong
lobby section to protect the interest of the industry and its clients,
supporting firms vis-a-vis the government and offering to voice the
members’ interests for policy reform.
2. Corporate tax exemption: Members of BASIS benefit from
corporate tax exemption until June 2019.
3. Discounted participation fee for events. SoftExpo, for instance, is
considered Bangladesh’s biggest event for software products,
ITES and ICT system solutions. It is attended by a multitude of
business organizations offering network opportunities and insights
into the latest technologies.
4. Office space rent reduction: Through a partnership with the
Ministry of Science, BASIS can offer its IT and ITES members
office space at a reduced rent. It also offers power supply and high-
speed Internet bandwidth.
5. BASIS/BRAC credit card: Members have the opportunity to get a
co-branded credit card to facilitate online foreign exchange
transactions.
6. Company profile in Software and IT catalogue: As part of its
marketing services, BASIS offers to enter firms in their IT
catalogue. The service catalogue contains a wide range of
information on services, products and company details.
7. SCB ERQ account service: BASIS and the Standard Charted Bank
offer a Foreign Currency Exporter’s Retention Quota account for
firms involved in service export in non-physical form such as
business services, research services, web and software
15
development. The facility allows the customer to keep the received
payments in both foreign (USD) and local (BDT) currencies and
allows for an unimpeded money transfer abroad.
8. Virtual card for DBBL: In partnership with the Dutch-Bangla Bank
Ltd, BASIS provides online payment facilities for firms involved in
mobile app and game development, enabling the payment of
license fees for reputed online marketplaces such as Google and
iTunes, other license fees and training fees relating to mobile
application and game development, domain registration and
hosting/cloud solutions.
9. Import remittance: Under the current legal processes in place,
Bangladeshi firms are faced with a huge barrier in financial
transactions, hindering their possibilities of importing directly.
BASIS helps make the importing process smoother by reducing
some of the bureaucracy. Import remittance is a means of payment
and minimizes the risk of non-compliance with the obligations as
stipulated in the contract established with the exporter.
10. E-commerce Alliance Activity: BASIS provides networking
opportunities with international stakeholders.
The financial instruments and services provided by BASIS facilitate the
export procedures for firms, making it easier to perform foreign financial
transactions. BASIS also supports firms to find new export markets by
offering networking services though participation in international events
and connecting firms with international stakeholders. Communication
channels are improved by promoting local firms in IT catalogues and
through the endorsement of the BASIS image. BASIS also helps firms
increase their financial resources by providing office space, and offering
tax redemptions, alleviating the administrative barriers.
In theory, BASIS should have a positive impact on exports through different
channels. The training programs help firms improve productivity, know-
how and their knowledge of international markets, while the BASIS
services help firms find new export markets, improve firm financial
16
resources and facilitate administrative procedures. Subsequently, the
following two hypotheses are investigated4:
4
Although I will statistically test for a causal relationship the hypothesis do
not claim a causal relationship to escape the causality trap.
17
4 Data Characteristics
In this chapter, I present the characteristics of the empirical data. The first
section describes the nature of the data and the sampling characteristics.
The second section describes the explanatory variables: services and
training programs, and gives an overview of the dependent and control
variables.
19
© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020
S. Brown, Impact of Business Association Services and Training
Programs on Export Performance, BestMasters,
https://doi.org/10.1007/978-3-658-30467-6_4
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P. brevicaudatus Ehlers. Hab. North Sea and Baltic, from ten fathoms.
H. spinulosus v. Sieb. (Fig. 219). Hab. North Sea, Arctic Ocean, and Baltic, in
from two to fifty fathoms.
Halicryptus casts its cuticle in May and September; it becomes loose first at the
hinder end, and the split between it and the skin grows forward until the animal lies
free in a cuticular mantle. After some days this is split, and the animal frees itself
from it; the cast-off cuticle includes for a short distance the lining of the mouth, the
anus, and the two generative pores.
Fig. 220.—A, Bonellia viridis Rol., ♀ ; B, B. fuliginosa. Both nat. size. a, Grooved
proboscis; b, mouth; c, ventral hooks; d, anus.
The body of the female Bonellia viridis, one of the best known species of Echiurids,
is shaped like a small sausage, and is usually about 2 inches long. The proboscis
arises from the anterior end, and is extremely extensible. At the distal end the
proboscis splits into two short arms, which are often recurved; along the whole
ventral surface runs a groove lined with cilia, which by the approximation of its
edges can be converted into a tube. At the bottom of the proboscis the groove
opens into the mouth. Echiurus; Thalassema, and the female Hamingia have short
proboscides, which do not bifurcate but otherwise resemble those of the female
Bonellia.
Fig. 221.—View of a female Bonellia viridis Rol., opened along the left side, × 2. a,
Proboscis cut short; b, a bristle passed through the mouth into the pharynx; c,
convoluted intestine; d, anal tufts or vesicles; e, ventral nerve-cord; f, ovary
borne on ventral vessel running parallel with e; g, position of anus; h, points to
position of external opening of nephridium; i, nephridium. This line is on a level
with the internal funnel-shaped opening.
The green colour of B. viridis is due to a special pigment, "Bonellein," which at one
time was thought to be identical with chlorophyll. A similar green colour is found in
Hamingia arctica, Thalassema baronii, and the larvae of many forms.
A short distance behind the mouth, on the ventral surface, the female Bonellia and
both sexes of Thalassema and Echiurus bear two incurved stout chitinous hooks;
these gave the name Gephyrea Armata to the above-mentioned genera. In addition
to these, Echiurus has a row of chitinous bristles surrounding the posterior end of
the body; the row is single in E. unicinctus, double in E. pallasii. These bristles are
formed, like the hooks on the introvert of the Sipunculoidea, by epidermal cells;
those of B. minor and of the posterior rings in Echiurus are said to arise each from a
single cell, just as the bristles do in Chaetopods.
The skin consists of very much the same layers as does that of Sipunculus; the
cuticle is thin, the epidermis is modified into numerous glandular cells, papillae, and
pits, from which the bristles arise. A third layer of oblique or circular fibres is usually
found inside the longitudinal muscle-layer. The proboscis is solid, and contains
much connective-tissue and numerous muscle-fibres running in all directions; the
ventral groove is ciliated.
The alimentary canal in the Echiuroidea consists of a long thin-walled tube with
numerous convolutions; it is not coiled as in Sipunculids, but the loops are
irregularly arranged, and are supported by numerous fine muscular strands which
run from the skin. There is a ciliated groove running along one side of the intestine,
as in the Sipunculids. The anus is terminal. The most striking peculiarity of the
alimentary canal of the Echiurids is the existence of a collateral intestine or "siphon."
This is a narrow tube which arises from the main canal not very far from the mouth,
and re-enters it again lower down. A similar structure occurs in some Echinids, and
in the Capitelliformia (pp. 272, 305). Its function is not certainly known.
The "brown tubes" or nephridia vary in number in the Echiurids. In the female
Bonellia there is but one; in B. viridis the right, in B. minor the left usually persists. In
shape, colour, contractility, and minute structure they closely resemble those of
Sipunculus. Hamingia is said to have a pair of brown tubes; Echiurus has two pairs,
except E. chilensis, which has three; their internal openings are produced into long
coiled slits in some genera. Thalassema gigas has one pair; Th. neptuni, Th.
baronii, Th. formosulum, and Th. exilii, two; whilst Th. vegrande, Th. moebii, Th.
erythrogrammon, Th. caudex, and Th. sorbillans have three pairs.
The nervous system consists of a ventral cord lying in the body-cavity, as in the
Sipunculoidea, but attached to the skin, and of a circumoesophageal ring. With the
growth of the proboscis this ring is drawn out, and the two branches run along the
sides of the proboscis and unite at the tip. There is no specialisation of brain, nor
are any special sense organs present, but the ventral cord gives off paired nerves at
regular intervals, which, uniting dorsally, form rings in the skin in some and probably
in all species.
The genital glands are, like those of the Sipunculoidea, formed by a special
development of the cells lining the body-cavity. These cells are massed together
along the wall of the ventral blood-vessel. In Echiurus and in Thalassema the cells
break off and float in the body-cavity, developing into ova and spermatozoa. In
Bonellia each cell does not become an egg, but a mass of cells breaks off, one of
which increases in size at the expense of the others and forms the ovum. The
mature sexual cells leave the body through the nephridia.
Fig. 222.—An adult male Bonellia viridis Rol. The original was 1.5 mm. long. The
nervous system is not shown. (After Selenka.). a, Generative pore with
spermatozoa coming out; b, anterior blind end of intestine attached to the
parenchymatous tissue by muscular strands; c, green wandering cells containing
chlorophyll; d, parenchymatous connective-tissue; e, epidermis; i, intestine; j, vas
deferens; l, internal opening of vas deferens; m, the left anal vesicle; n,
spermatozoa in the body-cavity.
Bonellia and Hamingia present very interesting cases of sexual dimorphism. In both
genera the female is an animal of considerable size with the normal structure of the
Echiuroidea, but the male (Fig. 222) is a microscopic Planarian-like animal, which
lives in the mouth and in the nephridia of the female. Both in Bonellia[486] and in
Hamingia the male is provided with a pair of hook-like ventral bristles; these are
wanting in the female Hamingia. The surface of the male is ciliated, and the skin
contains circular and longitudinal muscle-fibres. The body-cavity is developed, but
does not reach to either end of the body. The alimentary canal is closed, neither
mouth nor anus existing; it is supported by regularly arranged dorso-ventral muscle
strands. A nerve-ring and a ventral cord exist. There are also two rudimentary
organs corresponding with the anal vesicles of the female, and a single nephridium
which acts as a duct for the spermatozoa; the latter arise from modified cells lining
the body-cavity.
In both sexes the larvae develop to a certain stage without showing any trace of
sexual differentiation, but after this stage, the development of the male is to a
certain extent arrested; in some respects, indeed, it undergoes retrogressive
changes. At this time it is found clinging to the proboscis of the female, thence it
makes its way to the mouth, where it undergoes its final change; and then creeping
out, finds its way into the nephridium of the female, and spends the rest of its life
there in a special recess cut off by a fold from the excretory part of this organ. In
Hamingia, however, Lankester, who first described the male, did not find any in the
nephridia, but found five specimens, each 1⁄12 inch long, within the dilated pharynx
of the female.
Development.—In Bonellia and Hamingia it seems probable that the ova are
fertilised in the nephridium of the female; in the other genera they are fertilised in
the water after leaving the body of the mother.
In Thalassema and Echiurus the growth of the embryo results in the formation of a
typical Trochosphere larva, a type widely spread in the animal kingdom, being found
in the Chaetopoda (Fig. 145, A), Polyzoa (p. 510), and Mollusca. The large prae-
oral lobe persists in the Echiuroidea as the proboscis; the mouth is ventral in
position, with usually a ring of cilia encircling the body in front of and behind it; the
anus is posterior and terminal. A pair of larval excretory organs are present, and a
special nervous aggregation of cells at the apex of the prae-oral lobe is usually
indicated by the presence of a bunch of long cilia.
The anal vesicles arise quite late in the development; when they have acquired their
openings into the body-cavity, they seem to take in water. In Thalassema, as
described by Conn, this is accompanied by remarkable changes, amounting almost
to a metamorphosis. The body increases in bulk fourfold, the cilia of the prae-oral
ring disappear, and the animal now moves only by means of its proboscis; the
pigment is absorbed, and all traces of segmentation disappear. A similar intaking of
water is described by Spengel in Bonellia. In this genus the larva, which is coloured
bright green, and has two brown eye-spots, is not such a typical Trochosphere as is
that of Echiurus and Thalassema.
Fig. 223.—Echiurus pallasii Guér. × ½. a, Mouth at the end of the grooved proboscis;
b, ventral hooks; c, anus.
Greef mentions eight species of Thalassema and Rietsch thirteen; three of these,
however, Th. grohmanni, Th. lessonii, and Th. pelzelnii, were not seen by either
author, and their description is taken from Diesing. There is some reason for
thinking that the two first-named species are identical with Th. neptuni. Conn has
established a new species for the specimens whose embryology he worked out at
Beaufort, Virginia, and Selenka described a new species from the Challenger
material.
With the exception of the three doubtful species mentioned above, the list of species
of Thalassema is as follows:—
Th. erythrogrammon Max Müller. Red Sea and East Indies (Billiton).
Th. caudex Lampert. Red Sea and Indian Ocean.
Bonellia.—Proboscis very extensible and bifurcated at the end. The body and
proboscis are coloured a bright green. Two ventral hook-like bristles, but no peri-
anal ring. A single nephridium. The above applies to the female; the males are
degenerate, and live in the nephridium or pharynx of the female.
This genus was first described by Koren and Danielssen as H. arctica. Two
specimens were afterwards described by Horst as H. glacialis. Later Lankester
described two other specimens; he was the first to find the male in the pharynx of
the female. He is of the opinion that all three descriptions apply to the same
species, and for this the original name H. arctica must be retained.
Hamingia arctica K. and D. Two hundred miles north of North Cape and in the
Hardanger Fjord.
Saccosoma.—No proboscis. The body is flask-shaped. The mouth and anus are
terminal. The ovary is anterior, and there is only one nephridium. No bristles.
Our knowledge of this remarkable Gephyrean is very incomplete, but such as it is, it
is due to the careful investigations of Koren and Danielssen, who had only a single
specimen at their disposition.
Habits of the Echiuroidea.—As a rule the members of this group conceal their
bodies in clefts and fissures of rocks and stones, keeping up communication with
the outer world by means of their proboscis. Rietsch[488] describes a specimen of
Bonellia minor, which he placed in an aquarium, exploring with its proboscis the
nature of the bottom; when the animal had found a convenient crevice, it fixed its
proboscis in it by means of the bifurcated end, and by its contraction drew the body
up, and entered the hole, proboscis first. It then turned round, and during this
operation doubtless the ventral hooks came into play; and then stretching out its
proboscis, it began to explore the neighbourhood. The proboscis is evidently very
sensitive, and in addition to being a locomotor organ, it is also used for the
prehension of food. If cut off near the mouth, the animal does not long survive, but if
a considerable portion is left the scar heals, and the lost part is probably
regenerated. In captivity the animals frequently change their place of residence.
Eisig some years ago described the great extensibility of the proboscis of B. viridis
when confined in the tanks of the Zoological Station at Naples. When contracted the
proboscis was but a few inches long, but at times it was extended till it reached the
length of 1½ metre, shining through the water as a transparent green thread. The
body of the Bonellia was hidden under stones, but the proboscis could be seen
seizing between its two ends the bodies of certain Ascidians which covered the
inside of the tank, tearing them off the walls, and conveying them to the mouth along
its grooved ventral surface.
The food of the Echiuroidea consists of organic matter, in the main of animal nature,
but the group differs from the Sipunculoidea in not eating sand.
Rietsch describes Thalassema neptuni as being more active in its movements and
less sedentary than B. minor. The proboscis is still the chief organ of locomotion,
but the trunk plays a greater part in the movements of the animal than it does in the
last-named species. Th. neptuni is found in cavities of stones or in the chambers
worn out by the Mollusc Gastrochaena; when withdrawn from its house the body is
found to be covered by a thick layer of tenacious viscid mucus.
Fig. 224.—Thalassema neptuni Gaert. × 2. A, The animal lying on its
ventral surface. B, Ventral view of the anterior end, showing the
grooved proboscis ending behind in the mouth, and the ventral
hooks.
To sum up, it seems probable that the Echiuroidea are derived from
the Chaetopoda, and that their nearest ally in this group is
Sternaspis; and that the Sipunculoidea are allied to the Echiuroidea,
but have further departed from the Annelid stock, and have lost even
those traces of affinity with the parent group which have been
preserved in the development of Echiurus and Thalassema.
CHAPTER XVI
PHORONIS
HISTORY—HABITS—STRUCTURE—REPRODUCTION—LARVA—
METAMORPHOSIS—LIST OF SPECIES AND LOCALITIES—SYSTEMATIC
POSITION.
What little we know about the habits of Phoronis is in the main due to
the observations of Cori,[492] who studied Ph. psammophila at Faro,
an inlet of the sea near Messina. The least disturbance causes the
animal to withdraw its head with lightning rapidity into the tube, from
which after a time it re-emerges very slowly, and does not expand its
tentacular crown until its body is completely extended. Cori states
that not unfrequently individuals are found either without the crown of
tentacles or with the latter in process of regeneration. These may
have been bitten off by fish, etc.; but, on the other hand, van
Beneden describes in Crepina gracilis (Ph. hippocrepia) the throwing
off and regeneration of the crown of tentacles; and Cori confirms his
observation, at any rate as far as concerns those individuals kept in
captivity, and whose surroundings were presumably somewhat
unfavourable. He further observed the interesting fact that the cast-
off crown of tentacles continued to live, and suggests that possibly it
may develop a new body, in which case the phenomenon would be
an interesting case of binary fission producing two new animals.