Economics, Econometrics and Finance
4 years ago

Credit constraints drive firms to choose direct exporting over intermediaries.

China Economic Quarterly International
Credit constraint and firm’s export mode choice
Zhiyuan Li, Haichun Ye

Paper Summary

Firms with more money tend to choose advanced ways to sell things overseas. The best firms pick direct exporting, while others use middlemen. The more money a firm has, the better it is at exporting. This was shown in a study using data from many countries over 10 years.

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