DIRECT VIS-À-VIS INDIRECT MODE OF EXPORT IN SUB SAHARAN AFRICA: THEORETICAL AND EMPIRICAL INVESTIGATION
type: CreativeWork
description: This research examines direct and indirect mode of export in sub-Saharan Africa through a combination of theoretical and empirical analysis. We use firm-level data from 38 sub-Saharan Africa countries to test the theoretical findings. The first chapter analyzes a manufacturing firm that chose to export but faced with the discrete decision of choosing a mode of export. The firm weighs between exporting directly and indirectly. We investigate the factors that affect a firm's decision and compare the payoff in each scenarios viz., direct and indirect exports. We formulate a theoretical model for a single firm that can successfully choose from either export channels under various circumstances. Further, we compare the profits under either modes of export. We find that the profit of using direct export mode improves as a firm becomes more efficient, in which case the difference between the profits from using direct and indirect mode gets larger. Our empirical findings show similar relationships. The results also indicate that factors such as size of the firm, being a subsidiary of a multi-plant firm and access to information technology affect the choice to become direct exporter positively. On the other hand, a firm's increased perceptions of obstacles to current operation in the forms of lack of access to finance and corruption are associated with decreased probability of becoming direct-exporter. The second chapter's primary goal is to investigate the oligopolistic interdependence between direct and indirect exporters in the presence of government subsidy. It makes one main assumption that is government subsidy provision targets only direct exporters. In our analysis, we present the effects of pre-determined subsidy and subsidy as a function of levels of inefficiency of both mode exporters and competition between direct exporters. We find that the socially optimal subsidy is negative implying that the chosen policy instrument is a tax on the direct exporters. For both …
abstract: This research examines direct and indirect mode of export in sub-Saharan Africa through a combination of theoretical and empirical analysis. We use firm-level data from 38 sub-Saharan Africa countries to test the theoretical findings. The first chapter analyzes a manufacturing firm that chose to export but faced with the discrete decision of choosing a mode of export. The firm weighs between exporting directly and indirectly. We investigate the factors that affect a firm's decision and compare the payoff in each scenarios viz., direct and indirect exports. We formulate a theoretical model for a single firm that can successfully choose from either export channels under various circumstances. Further, we compare the profits under either modes of export. We find that the profit of using direct export mode improves as a firm becomes more efficient, in which case the difference between the profits from using direct and indirect mode gets larger. Our empirical findings show similar relationships. The results also indicate that factors such as size of the firm, being a subsidiary of a multi-plant firm and access to information technology affect the choice to become direct exporter positively. On the other hand, a firm's increased perceptions of obstacles to current operation in the forms of lack of access to finance and corruption are associated with decreased probability of becoming direct-exporter. The second chapter's primary goal is to investigate the oligopolistic interdependence between direct and indirect exporters in the presence of government subsidy. It makes one main assumption that is government subsidy provision targets only direct exporters. In our analysis, we present the effects of pre-determined subsidy and subsidy as a function of levels of inefficiency of both mode exporters and competition between direct exporters. We find that the socially optimal subsidy is negative implying that the chosen policy instrument is a tax on the direct exporters. For both …
author: Gebrehanna, Seifu
keywords: econometrics, Industrial Organisation, International economics, Microeconomics, Trade
date published: 2012-05-01T07:00:00Z
date modified: 2026-07-24T04:33:54Z
provider: Southern Illinois University
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: Southern Illinois University