Firms survival and international trade: The impact of exports and imports

Double Degree. A Work Project presented as part of the requirements for the Award of a Masters in Management from Nova School of Business and Economics and Maastricht University.

This study examines the relationship between firm’s engagement in international trade – namely exports and imports - on firm’s survival. Moreover, it studies the impact of the duration of exports and duration of imports on firm’s survival. It uses a panel data of 674 firms of the information technologies & software (ITS) industry in India between the year 2002 and 2009. Results show that exports are not linked to firm’s survival, whereas imports establish a strong positive link. It is also tested the impact of two-way trade on firm’s survival which is not found to be significance or to influence the impact of exports and imports alone on firm’s survival. Moreover, results show that, although exports are not significant, the hazard facing exporters is higher when duration of exports is also higher. In addition, duration of imports alone positively impacts firm’s hazard rate. I discuss some theoretical and managerial implications of these results as well as limitations of this study and potential future research.

NSBE - UNL