CHOICE OF EXPORT CHANNEL BY MICRO, SMALL AND MEDIUM ENTERPRISES IN INDIA
Under globalization, with competitiveness as the sole policy objective of economies, it needs to be noted that countries do not trade; indeed, firms do. In general, international trade theories assume that enterprises wanting to sell their products in foreign markets export directly to the final consumers. On the other hand, in recent years, theories focusing on the exporting behavior of firms have taken into account the heterogeneity prevailing among trading firms in the presence of intermediaries. In India, studies have not taken into account the heterogeneity aspect of exporting firms to reach the international market. In this context, the present study has attempted to fill this gap by analyzing the factors that govern the choice of a particular channel of export by Micro, Small, and Medium enterprises in India. A multinomial logit model was employed to examine the factors influencing firms’ choice of export modes. Firms’ decision to trade through a particular channel is mainly driven by their size, fixed cost of exporting, and quality of products.
International trade, Channels of export, Multinomial-logit model