Examining the Impact of Government Subsidies on Export Performance: The Mediating Role of Competitive Capabilities

Abstract

Export performance, as a key indicator of firm success in international markets, plays a critical role in economic growth and sustainable development. This study aims to examine the impact of government subsidies on export performance, with the mediating role of competitive capabilities, in food industry firms located in Abbasabad Industrial Town. The research is applied in terms of purpose and descriptive-correlational in terms of methodology, employing a survey design. The statistical population consisted of 200 sales managers, CEOs, and marketing managers of food industry firms active in exports within Abbasabad Industrial Town. The sample size was determined as 132 based on Cochran’s formula and was selected using a non-probability convenience sampling method. Data were collected using standardized questionnaires, whose content validity was confirmed by experts and reliability was assessed using Cronbach’s alpha. Data analysis was conducted using SPSS and Smart-PLS software with Structural Equation Modeling (SEM). The results indicate that government subsidies have a positive and significant effect on both export performance and competitive capabilities. Furthermore, competitive capabilities exert a positive and significant effect on export performance and were confirmed to mediate the relationship between government subsidies and export performance. Firms benefiting from government support in marketing, technical competencies, and international sales demonstrated superior export outcomes. Overall, government subsidies enhance export performance through the strengthening of competitive capabilities. Accordingly, policymakers can foster non-oil export development by designing targeted support packages aimed at enhancing firms’ competitive capabilities.