A Firm's Choice between Direct and Indirect Export Channel of Exports by : A Study of Manufacturing Firms in Sub Saharan African Economies

In this study, we analyze a manufacturing firm's discrete decision of exporting using either direct or indirect channels. We investigate the factors that affect a firm's choice by comparing the payoff in each mode of exports. We formulate a theoretical model for a single firm that can successfully choose from either of the channels due to changes in efficiency level. Using data from manufacturers in 38 sub-Saharan African countries, we find empirical evidence that support our theoretical findings. The results also indicate that factors such as size of the firm, being a subsidiary of a multi-plant firm, access to information technology, perceptions of obstacles to current operation in the forms of lack of access to finance and corruption affect firm's choice