THE USE OF FOREIGN TRADE ZONES IN INTERNATIONAL LOGISTICS SYSTEMS: AN EMPIRICAL STUDY OF IMPORT/EXPORT FIRMS IN THE U.S. (DISTRIBUTION, MARKETING, UNITED STATES)

Scope of Study. This study investigates how firms decide whether to use facilitating services in their international logistics systems. Foreign trade zone services were chosen for an in-depth investigation in order to fulfill the aforementioned goal. The study was three specific objectives: (1) to identify factors involved in the decision to use foreign trade zones and their relationships; (2) to propose and test a model of foreign trade zone usage decision which represents the relationships among relevant variables; and (3) to compare current users and non-users in terms of their awareness of and attitude toward foreign trade zone benefits and service quality.; To achieve these objectives, two types of firms involved in import and export activities were surveyed by mail. The response rates for the user and the non-user samples were 22.4% and 20.3% respectively. The data were analyzed using two-group stepwise discriminant analysis and factor analysis to obtain in-depth comparisons between the two types of firms. In addition, a structural equations approach using the LISREL VI program was utilized for testing the proposed model of zone usage decisions. Descriptive information on firm characteristics, level of import/export involvement, third party influence and product suitability were also provided with Chi-square tests of the differences between the two groups.; Findings and Conclusions. Firms that use a foreign trade zone were found to be different from those that do not in terms of firm characteristics, their import/export involvement, and their attitude and evaluations of such facilitating services. The level of imports was the most important explanatory variable in discriminant analyses. The structural equations model did not show an overall good fit, but several of the specific relationships among the variables and constructs were statistically significant.