Unraveling market access opportunities through one stop border posts: Traders’ perceptions on the influence of administrative practices and cross-cultural competences

Toba Nguvila (Department of Business administration and management, The University of Dodoma, Dodoma, Tanzania)
Elia John (Department of Business administration and management, The University of Dodoma, Dodoma, Tanzania)
Ismail Juma Ismail (Department of Business administration and management, The University of Dodoma, Dodoma, Tanzania)

LBS Journal of Management & Research

ISSN: 0972-8031

Article publication date: 3 June 2024

163

Abstract

Purpose

In the process of one stop border posts (OSBP), market access is dynamic. In this context, administrative practices and cross-cultural competence among traders are crucial for market access. However, there is limited research on how cross cultural competences can strengthen the influence of administrative practices on market access among small traders. This study therefore aims at exploring this relationship.

Design/methodology/approach

This study used structured questionnaire to collect data from 328 traders of maize, onion and tomatoes at Namanga OSBP. Data were analyzed using PLS-SEM.

Findings

The results of this study imply that administrative practices and cross-cultural competences significantly and positively influence market access. Finally, cross-cultural competence is a significant positive moderator of the relationship between administrative practices and market access.

Originality/value

The results suggest that cross-cultural competence is a significant moderator of the relationship between administrative practices and market access. This adds new knowledge in the literature on how cross-cultural competences of the traders can strengthen the influences of administrative practices at the OSBPs for high market access.

Keywords

Citation

Nguvila, T., John, E. and Ismail, I.J. (2024), "Unraveling market access opportunities through one stop border posts: Traders’ perceptions on the influence of administrative practices and cross-cultural competences", LBS Journal of Management & Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/LBSJMR-03-2023-0014

Publisher

:

Emerald Publishing Limited

Copyright © 2024, Toba Nguvila, Elia John and Ismail Juma Ismail

License

Published in LBS Journal of Management & Research. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode


Introduction

Access to markets across borders is an essential component of international trade, and it plays a critical part in fostering the expansion and growth of economies around the world (Gereffi, Lim, & Lee, 2021). Because it makes it possible for businesses to gain access to new customers, boost their sales, and expand their operations, it is an essential component of international trade. Countries that have open and easily accessible cross-border markets typically experience higher levels of economic growth and development. This is because these countries are better able to entice foreign direct investment, foster healthy levels of competition, and encourage the development of innovative policies (Rippa, 2019). The importance of attaining entry into international markets is of utmost significance, particularly for emerging nations whose economies are often reliant on outbound trade.

While it is paramount for traders to gain access to global markets spanning borders, they often confront various hurdles that curtail their ability to engage in international trade (Friel, Schram, & Townsend, 2020). These hindrances can pose challenges for traders seeking to tap into foreign markets. Moreover, trade barriers are linked to heightened trade costs and hinder the movement of goods and services across international frontiers. This is particularly problematic for smaller enterprises that may lack the resources needed to comply with more intricate regulations (Ismail, 2022; Ismail & Changalima, 2022). Furthermore, one of the most formidable difficulties encountered by merchants pertains to the inadequate infrastructure. This can manifest as insufficient transportation networks, border facilities, and communication systems (Rehman, Noman, & Ding, 2020).

These challenges can result in elevated transaction expenses, delays in the transit of goods across global boundaries, and limitations on the range and volume of tradeable products. Enhancing infrastructure can reduce the expenses associated with international trade, enhance effectiveness, and facilitate the seamless movement of goods across borders (Donaubauer, Glas, Meyer, & Nunnenkamp, 2018). This provides business owners with the opportunity to expand their operations into new markets.

One-stop border posts (OSBPs) can serve as an effective solution to facilitate international trade by simplifying administrative procedures and consolidating multiple checkpoints into a single location. According to Kahiya and Kadirov (2020), OSBPs establish a standardized administrative and operational system that enhances risk management capabilities and streamlines law enforcement processes. Furthermore, they contribute to improving market access by facilitating the exchange of information and enhancing the efficiency of cross-border trade, (Mamkeli, 2014). Nonetheless, despite recognizing the significance of OSBPs, there is limited knowledge about how administrative practices at these posts impact traders' access to markets, especially in the context of developing countries like Tanzania.

Most of the available studies are qualitative and primarily focus on a superficial examination of processes at OSBPs, particularly in the context of informal cross-border trade, (Kahiya & Kadirov, 2020). This highlights the need for additional qualitative studies to thoroughly establish the relationship between the different variables. In addition to that, the implementation of OSBPs needs to be accompanied by streamlined processes and simplified procedures to bring about significant economic benefits (Kahiya & Kadirov, 2020). Customs administrations play an important role in ensuring the smooth operation of international trade and can significantly contribute to the expansion of the economy by adopting efficient and transparent procedures (Yoon, Talluri, Yildiz, & Sheu, 2020). Harmonizing procedures, streamlining processes, and simplifying documentation can reduce the regulatory burdens placed on businesses and ultimately stimulate economic growth (Odero, 2020; Tyson, 2018).

At the same time, even though streamlining administrative processes is essential as noted, there are still some doubts as to whether or not this alone will be enough to expand market access across international boundaries. According to the body of knowledge, even if the administrative processes at OSBPs are improved, traders still need to have other essential characteristics such as a willingness to take risks, the ability to adapt, and the ability to network effectively in order to effectively improve their market access. As a result, it is extremely important to take into account a diverse range of factors that can have an effect on market access.

Research conducted by Osei-Bonsu (2016) underscores the pivotal role of possessing cross-cultural competencies for success in international business management. Traders can gain a competitive edge in the market by adeptly recognizing, reconciling, and even leveraging cultural differences to their advantage. Furthermore, Bartel-Radic and Giannelloni (2017), emphasize that cross-cultural competence equips individuals with the essential skills and knowledge to effectively engage with individuals from diverse cultural backgrounds. This holds paramount significance in the realm of international trade, where businesspersons must navigate intricate cultural nuances and diverse communication styles to establish and maintain successful professional relationships. Developing cross-cultural competencies empowers businesspeople to comprehend the cultural norms and practices of their international counterparts, allowing them to adapt and build trust, fostering collaboration (Caligiuri & Caprar, 2022). Consequently, this can result in enhanced business success and expanded access to global market.

Furthermore, despite the increasing recognition of cross-cultural competence as a crucial aspect of international trade, research has often overlooked the substantial environmental factors that influence its efficacy (Johnson, Lenartowicz, & Apud, 2006). Consequently, a comprehensive approach that takes into account not only administrative procedures but also cross-cultural competence can offer a more thorough perspective when analyzing market access from both collective environments such as OSBP perspectives and traders' perspectives. This approach suggests that enhancing administrative procedures at cross-border locations can genuinely enhance market access when coupled with traders' cross-cultural competence. Traders possessing cross-cultural competence are better equipped to navigate the intricacies of cross-border trade by comprehending and adapting to the cultural norms and practices of their international counterparts (Orra, 2021). This, in turn, can contribute to the reduction of trade barriers, increased efficiency, and the promotion of economic growth through enhanced market access.

In this regard, this research significantly contributes to the existing body of knowledge by underscoring the pivotal roles that administrative procedures and cross-cultural competencies play in enhancing market access for businesses operating internationally. The study aims to construct a theoretical framework elucidating how the strengthening of cross-cultural competencies among traders can amplify the impact of administrative procedures on the successful attainment of market access. This will be achieved through the adoption of a comprehensive methodology.

The primary objective of this research is to investigate the direct influence of administrative procedures on market access, with a secondary objective being the examination of how cross-cultural competencies moderate this relationship. The study seeks to illuminate the specific factors influencing the success of international businesses by providing a nuanced understanding of the interplay between administrative procedures and cross-cultural competencies. This endeavor will yield valuable insights that can guide policymakers and practitioners in developing effective strategies and policies to promote cross-cultural competencies among traders, thereby enhancing the competitiveness of businesses operating in cross-border environments.

Theoretical review

Stakeholder theory and a theory of planned behavior

This study makes use of stakeholder theory and a theory of planned behavior. The reasoning behind this choice is that cooperation between traders and administrators who are key stakeholders is critical to achieving favorable outcomes from OSBP administrative procedures. Furthermore, accessing the market is a planned behavior that necessitates the consideration of several stakeholders to effectively utilize the opportunities provided by OSBPs. According to stakeholder theory (Gibson, 2000), when making decisions and achieving goals, organizations must consider the concerns of stakeholders who can influence or are influenced by their operations. This approach is important to promote accountability and responsibility to a diverse set of stakeholders. The concept of stakeholders acknowledges the complexity and flexibility of the relationship that exists between organizations and individuals they serve. This line of enquiry hypothesizes that traders who operate across international borders may either have an effect on or be affected by the success of OSBPs. This is due to the fact that in order for them to comply with the rules and regulations of OSBPs and actively participate in all procedures, they will be able to gain effective access to cross-border markets. Traders are regarded as the most important stakeholders because OSBPs could not come into existence or continue to operate without them. In a similar vein, the administrators at the OSBP can be considered secondary stakeholders because of the impact they have on the traders through the administrative processes that take place at the border (Cheruiyot & Rotich, 2018).

In addition, the theory of planned behavior postulates that an individual’s behavioral intentions and actions are impacted by their perspective on behavior, their subjective norms, and their level of perceived behavioral control (Ajzen, 1991). This theory was utilized in this study to clarify the impact that administrative procedures and cross-cultural competencies have on the level of access that traders have to international markets. Although administrative procedures at OSBPs are considered to be an important planned behavior with the goal of facilitating cross-border trade, successful market access is dependent on other planned behaviors, such as personal efforts to enhance cross-cultural competencies, particularly when conducting business with countries in other regions.

Hypothesis development

Administrative procedures and market access

Theoretically, the improvement of administrative procedures in an organization results in increased satisfaction and participation in the organization’s activities. It is therefore suggested that, the OSBP, which promotes a coordinated and integrated approach to facilitate international markets, the movement of people, and enhanced security, can be one among the models of border management that can reduce routine administrative activities and duplications across borders (Nugent & Soi, 2020). Generally, OSBPs have been introduced strategically to improve coordinated procedures and facilitate the movement of goods across shared borders from the perspective of international coordinated border management (Kieck, 2010). As a result of the realization that less restrictive borders can improve access to international markets, many nations have adopted this strategy, pushing for less restrictive borders and utilizing OSBPs as instruments of regional integration by facilitating legitimate trade in common markets (Cheruiyot & Rotich, 2018; Swaleh, 2020).

Although little is known on how some specific administrative practices at OSBP can influence market access among traders, according to Feaver and Wilson (2007), OSBP reforms on trade facilitation should prioritize regulatory harmonization, system and process re-engineering, capacity building, and administrative re-organization. The objective of border management should be to reduce administrative and compliance costs and increase time savings. Additionally, OSBPs should prioritize the eradication of administrative misconduct at physical borders (Nugent & Soi, 2020). Therefore, it can be hypothesized that OSBPs have the potential to improve border management and promote market access, but only if reforms are enacted to improve administrative procedures and eliminate administrative misconduct. Thus, it is possible to hypothesize that.

H1.

Administration procedures significantly influence market access among cross boarder traders

Cross-cultural competences and market access

Cross-cultural competence refers to a person’s capacity to collaborate successfully with individuals from various national and cultural backgrounds, both at domestic and abroad, by drawing on a variety of knowledge, skills, and personal qualities. Lack of cross-cultural competence has been identified as a significant factor in the failure of many traders in international business (Johnson et al., 2006). According to Gertsen (1990), cross-cultural competence is the capacity of a person to function successfully in a culture that is different from their own. It consists of three interrelated dimensions: an affective dimension (personality traits and attitudes), a cognitive dimension (how people learn and classify cultural information), and a communicative and behavioral dimension. According to Li (2020), Wu, Bui, and Dao (2022), earlier research has shown a significant connection between cross-cultural proficiency and market access.

Specifically, for individuals or businesses aiming to effectively enter foreign markets, prior research has emphasized the importance of possessing cross-cultural skills to navigate the complex and competitive social landscape of international commerce. With cultural diversity influencing consumer preferences and expectations in different countries, as pointed out by Charoensukmongkol (2020), it becomes essential for these entities to have the required cross-cultural competence to manage international endeavors. In the pursuit of successful international business operations, Chatterjee, Chaudhuri, and Vrontis (2022) also underscore the crucial need for organizations to cultivate adaptability and competency in dealing with cultural differences. The development of cross-cultural knowledge and abilities must be given top priority by organizations in order to successfully negotiate the cultural complexities of international markets. It can be hypothesized that cross-cultural competence is a crucial component of success in international business. Hence it can be hypothesized that.

H2.

Cross-cultural competences significantly influences market access among cross boarder traders

Moderating effect of cross-cultural competences

Market access for cross-border traders can be significantly aided by administrative practices at OSBPs, particularly for those who demonstrate a high level of cross-cultural competence. Administrative barriers to international trade cannot be eliminated solely by streamlining and harmonizing customs administrative processes and documentation. According to Kieck (2010), appropriate cultural aspects of all process participants are also crucial. The moderating and mediating effects of cross-cultural competences have been examined in a number of previous studies using various variables in various ways. In cross-cultural sales, Charoensukmongkol (2020), discovered that trait mindfulness, one element of cross-cultural competence, can enhance the connection between cultural interagency and adaptive selling behavior. As an alternative, Kai Liao, Wu, Dao, and Ngoc Luu (2021), discovered that cross-cultural proficiency can serve as a mediating factor, connecting expatriate cross-cultural adjustment to expatriate performance. They contend that the ability to successfully interact with people from various national and cultural backgrounds is related to a set of behavioral competencies. Hence it can be hypotheses that.

H3.

Cross-cultural competences significantly moderate the relationship between administrative procedures and market access among cross boarder traders

Methodology

Sample and data collection procedure

This research collected data from traders who conduct their business across Namanga OSBPs which save traders between Tanzania and Kenya. The sampling frame used for the sample selection was obtained from the list of traders registered in Longido district council and Tanzania Revenue Authority (TRA). Thus, a total of 350 self-administered structured questionnaires were distributed to traders of maize, onion and tomatoes. General, there are several products which cross boarder to Kenya, however, most of challenges related to administrative procedures and cross-cultural competences are bone to small traders engaging in these category of products. Of this total, 335 questionnaires were returned distributed. However, after a thorough checking, 7 questionnaires were found to be incomplete. Therefore, only 328 questionnaires were used in this study accounting to 94% of the questionnaires initially distributed.

Measurement scale

This study involved 11 items adopted from previous studies. For measuring administration practices, the study adopted items from Christofi, Vrontis, Thrassou, and Shams (2019). Also, the items used to measure cross-cultural competences were adopted from Gertsen (1990). Finally, to measure the market access, the study adopted measurement items from Henchion and McIntyre (2005). However, items were modified to fit with the methodological requirements and the context of market access in Tanzania context. Apart from that respondents were asked to rate items from 1 “strongly disagree” to 5 “strongly agree” (see Appendix).

Data analysis

The study used Partial Least Square structural equation modeling (PLS-SEM). According to Hair, Risher, Sarstedt, and Ringle (2019), PLS-SEM considered to be capable to assess relationships of observed and latent variables. It is further considered to be capable in testing simple and complex relationship. Therefore, the relationship between administrative practices and market access as well as the moderating role of cross-cultural competences was effectively tested. During the process, the study involved measurement model and structural model for measuring model properties and for path analysis respectively.

Results

Measurement model

The results in Table 1 suggest that composite reliability (CR) and Cronbach’s alpha (CA) were 0.869 and 0.854 for administrative practices, 0.853 and 0.849 for cross-cultural competences and 0.810 and 0.808 for market access. This means values were greater than 0.7 and hence they were reliable to explain the construct (Hair, Ringle, & Sarstedt, 2011). The results also show that the values of AVE were above 0.5 suggesting that convergent validity was achieved (Henseler, Hubona, & Ray, 2016). Apart from that, the value for SRMR was 0.064 (<0.08) and that of NFI was 0.896 (> or = 0.90). These values are considered good fit (Henseler et al., 2014). Similarly, the values of (VIF) were less than 0.5 which indicates that there were no multicollinearity. Additionally, results in Table 2 show that heterotrait – monotrait (HTMT) ratios were less than the 0.90. As well the results of Fornell and Larcker’s tests had values greater than the correlations. This suggests that the discriminant validity was attained (Fornell & Larcker, 1981). Additionally, since cross loadings of the constructs indicators in Table 3 are higher than the other indicators, no problem with discriminant validity was found.

Structural model

Table 4 shows that R2 was 0.275 indicating that administrative practices and cross-cultural competences explain market access by a factor of 27.5%. Also results show that effect sizes (f2) for AdminA was 0.093 and for CrossC was 0.032. This indicates a large effect and a medium effect, respectively. Also predictive relevance (Q2) was 0.235. According to Hair et al. (2019), values greater than zero means independent variables have predictive relevance to the dependent variable. Apart from that results in Table 4 and Figure 1 show that administrative practices significantly influence market access with (β = 0.393, t = 5.628, p < 0.001) hence H1 was supported. Also, cross-cultural competences significantly influence market access by (β = 0.228, t = 3.153, p = 0.002). Therefore, H2 was supported. Finally, Table 4 revealed that cross-cultural competence is a significant moderator of the relationship between administrative practices and market access with (β = 0.157, t = 2.788, p = 0.005). Thus H3 was supported. Further, the graph (Figure 2) shows that when cross-cultural competence is high the effect of administrative practices on market access becomes stronger as compared to when cross-cultural competences are low.

Discussion and conclusion

The study’s conclusions imply that administrative practices are essential to the operation of OSBPs in order to give traders more access to the market. These practices cover the protocols, principles, and laws that control how people and things move across international borders. On the other hand, ineffective administrative procedures at OSBPs can cause protracted delays, expensive transactions, and a lack of transparency, which can impede traders' access to the market and discourage trade. To ensure the seamless flow of goods and services across borders, OSBPs must have streamlined administrative procedures that put speed, efficiency, and transparency first. This is supported by Amadi and Lenaghan (2020) who noted that improving administrative procedures at border crossings can result into improved market access. Effective administrative procedures at OSBPs can also aid in lowering corruption and enhancing border security, which can further encourage regional trade and investment.

Additionally, inconsistent administrative practices across nations can lead to confusion and increased costs for traders, especially small and medium-sized businesses. Because SMEs are frequently more susceptible to the negative effects of inefficient administrative practices, it is critical for OSBPs to give priority to administrative practices that help traders access the market. Streamlining administrative procedures can aid in lowering business expenses and fostering cross-border trade, which can support regional economic development. This is in line with Kapkai et al. (2020). In addition, this study found that as globalization continues to bring people from various cultures closer together, cross-cultural competences are becoming more and more crucial for cross-border traders. The ability of cross-border traders to reach markets is greatly influenced by their aptitude for navigating cultural disparities and effectively engaging with individuals from diverse cultural backgrounds. This is particularly crucial in countries marked by cultural diversity, where the ability to acquaint oneself with local partners and build trust with them hinges on a deep understanding of indigenous customs, traditions, and behaviors. Traders who demonstrate cross-cultural proficiency are more inclined to excel in cross-border trade since they possess the skills needed to connect with local partners and surmount cultural barriers that could otherwise hinder their market access. These findings are in line with Pezzi (2016) who highlighted the impact of cultural factors on cross-border deals of which the paper also noting that cross-border deals experience can moderate the effects of cultural differences. Apart from that, the study by Desai (2009) which focuses on how cross-border trade empowered women to develop the socioeconomic networks and improve their standard of living suggests the need for improving cross-cultural competences.

Additionally, cross-border traders can find new opportunities and adjust to shifting market conditions with the aid of effective cross-cultural competences. Understanding regional cultures and customs helps traders spot market gaps and create goods and services that cater to regional demands. They can also foresee changes in regional laws or commercial customs and modify their strategies in response, which can help them keep a competitive edge in the market. This is also supported by Gu and Meng (2022). The development of a diverse network of business partners, suppliers, and clients, which can further promote market access and support business growth and success, can be facilitated by cross-cultural competences in traders. In conclusion, cross-border traders must possess cross-cultural competences in order to build relationships, navigate cultural obstacles that may limit access to markets, find new opportunities, and adjust to shifting market conditions. The study also showed that cross-cultural competences can aid international businesspeople in spotting opportunities to enhance administrative procedures that can improve market access. The local community’s cultural norms and values can help traders identify potential areas for administrative practice improvement that could lower barriers to market access. Cross-culturally competent cross-border traders, for instance, can recognize the significance of clear communication and transparency in administrative practices, improving traders' relationships with local authorities and their access to the market.

Study implications

The research emphasizes that improving administrative processes at One-Stop Border Posts (OSBPs) is essential for facilitating market access for cross-border traders. However, the success of these improvements is contingent on recognizing the importance of cross-cultural skills. It’s imperative for cross-border traders to possess the requisite cross-cultural competencies, and it is the responsibility of policymakers and practitioners to ensure this. They can achieve this by implementing training programs or collaborating with local organizations to assist traders in building relationships with local counterparts. Policymakers and practitioners can play a vital role in aiding cross-border traders in navigating administrative procedures and establishing meaningful connections with local partners by promoting the development of cross-cultural competencies among them. Additionally, traders should train their employees for cultural competence so as to increase levels of market access across borders. This is a strategic initiative strategy which can yield substantial interaction of their employees in the global marketplace as the competences can offer understanding of the unique needs and preferences of consumers in different regions.

Limitation and area for further study

This study has used administrative practices and cross-cultural competences as the factors which can influence market access among traders. However, there are other important factors at OSBP such as technology infusion and integration which can sufficiently help to increase market access. Therefore, further studies can include technology aspects in relation to market access.

Figures

Structural model

Figure 1

Structural model

Slop analysis

Figure 2

Slop analysis

Measurement model

Constructs and itemsOuter loadingsVIFCACRAVE
Administration practices 0.8540.8690.627
AdminA10.7932.413
AdminA20.7962.399
AdminA30.7821.941
AdminA40.8272.057
AdminA50.7601.451
Cross-cultural competences 0.8490.8530.768
CrossC10.8401.791
CrossC10.9002.575
CrossC30.8882.242
Market access 0.8080.8100.722
MarkAcc10.8642.032
MarkAcc20.8561.836
MarkAcc30.8301.589

Source(s): Table by authors

Heterotrait–Monotrait ratio and Fornell–Larcker criterion

ConstructsAdminACrossCMarkAcc
Heterotrait – Monotrait ratio
AdminA
CrossC0.838
MarkAcc0.5240.494
Fornell – Larcker criterion
AdminA0.792
CrossC0.7390.876
MarkAcc0.4550.4150.850

Source(s): Table by authors

Cross loadings

ConstructsAdminACrossCMarkAcc
AdminA10.7930.5230.294
AdminA20.7960.5020.275
AdminA30.7820.5360.324
AdminA40.8270.5330.382
AdminA50.7600.7490.459
CrossC10.5940.8400.352
CrossC20.6520.9000.343
CrossC30.6930.8880.391
MarkAcc10.3800.2860.864
MarkAcc20.3920.3790.856
MarkAcc30.3860.3830.830

Source(s): Table by authors

Hypotheses testing

RelationshipsOriginal sample (O)Sample mean (M)Standard deviation (STDEV)T statistics (|O/STDEV|)p values
AdminA → MarkAcc0.3930.3960.075.6280.000
CrossC → MarkAcc0.2280.230.0723.1530.002
CrossC x AdminA → MarkAcc0.1570.1510.0562.7880.005

Source(s): Table by authors

Self-administered structured questionnaire

Kindly fill the following questionnaire with 1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree, 5 = strongly agree
Administration practices12345
I am involved in strategic decisions at OSBP
The administrative practices are well formalized at the OSBP
The OSBP provides training and development activities to traders
The traders are participating in management devolvement activities
The traders are involved in market opportunities
Cross-cultural competences
The OSPB has helped traders to developing personality traits and attitudes
The OSBP has helped traders to acquire enough cross-cultural knowledge
The OSBP has enabled traders to communicating in other countries
Market access
The traders are cooperating to form marketing groups for market access
The traders are involved in direct sales to consumers to access markets
Traders supply raw materials to other countries

Source(s): Table by authors

Appendix

Table A1

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Corresponding author

Ismail Juma Ismail can be contacted at: ismailjismail1977@gmail.com

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