CHAPTER – VI

RESEARCH METHODOLOGY

6.1 RESEARCH DESIGN

6.2 QUESTIONNAIRE DESIGN
6.3 COMPOSITION OF QUESTIONNAIRE
 A Critical Study of International Trade Settlement Methods in Post Globalization Era

CHAPTER VI: Research Methodology

In the chapter on literature review, the researcher made extensive review of

literature to crystallize and restate the research problem and to prove novelty of the
topic. The research problem restated and formulated as under:

I. How to overcome the various issues faced by established traders and potential

entrepreneurs, while entering into negotiations in selection and application of

appropriate method? As wrong selection may lead to resultant delay and

disputes.

II. How to resolve the paradox exhibited between rise in volume of world trade

and corresponding rise in disputes?

III. How to arrive at the consensus between the parties towards early and effective

trade settlement?

IV. Why excessive reliance is placed on Documentary Credit Method in the

hierarchy of methods?

6.1 Research Design:

In order to investigate into the problem of research in a scientific and

systematic way the Research Design proposed is “Exploratory in nature” however
formalized method i. e. Descriptive study is also adopted. Hence the Research Design
is the combination of Exploratory as well as Descriptive Research Design.

Thus the major part of research design is “Exploratory” so as to get clear idea
of the “Research Problem”. The exploration part mentioned above is carried out
through:-

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 Experience Survey:- of established traders , bankers and

academicians having expertise into Cross Border Trade Transactions

 The exploratory process is further accomplished through Insight

Stimulating Cases

The part of Research Design is also Descriptive in nature so as to elicit

information regarding different variables influencing Cross Border Trading and the
phenomenon of Cross Border Trade Transactions through Survey Method.

The different variables under Descriptive Study in the survey form, is

expected to enlighten the researcher with the help of responses to structured
questionnaire mainly on following variables implied in the research problem a)
determinants of Selection of Trade Settlement Method, b) Perception of Parties to the
towards Selection of Trade Method, c) Major Difficulties / Problems faced by parties
to the trade, d) Reasons of Delay in Settlement, e) perception of most Popular
Method of Trade and f) Awareness about limitations of each of the method.

Thus the Research Design is a combination of the “Exploratory and

Descriptive” study

6.1.1 Population:

The population of the study is comprises of following elements:

a) Merchant Traders in cross border trade transactions (i.e. Importers and

Exporters)’

b) Authorized Dealers i.e. ‘Bankers’ engaged in the Cross Border Trade

Transactions across the Globe.

The above stated elements of population are governed by “same set of Rules and
Regulations” framed by ICC. Moreover the Methods Of Trade Settlement i.e. Open
Account Trading, Advance Payment, Documentary Credits, Documentary Collection,
Consignment and International Trade Guarantees are commonly adopted and

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procedure of trade settlement with the help of above methods is uniform irrespective
of traders location (i.e. at Pune, India or across the Globe) and hence elements of
population are homogeneous in nature.

6.1.2 Sample Design and Sample Size

In view of this researcher thought it fit to opt for “Non Probability Judgment
Sampling”

The criteria for judgment sampling is the vicinity and easy accessibility. Since
the research being carried out in a Metro Town Pune, the researcher selected
representative sample from Merchant Traders and Authorized Dealers in Pune
towards fulfillment of above criteria. The elements of population from metro town
Pune, are considered homogeneous being governed by same set of rules and
regulations.

Thus, in view of the fact that Traders and Bankers are governed by same
set of rules framed by International Chamber of Commerce (Paris) viz (UCPDC
600, ICC Publication 2007 Revision) ,it is sufficient to prove that the sample
chosen from metro town Pune is a representative sample of traders and banker
community indulged in cross border trading.

Sampling Frame:

In order to determine the sampling frame the researcher has done scrutiny of
various websites displaying list of importers and exporters namely a)
www.worldbiz.in, (Maharashtra Companies Database) b) www.punediary.com (Pune
based companies database) c) www.hudku.com (Pune based companies database who
are originating their transactions from Pune .

The authentic source of Importers and exporters list is procured by Mahratta

Chamber of Commerce Industries and Agriculture Pune (MCCIA) Pune which

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includes the list of such exporters and importers in and around Pune is irrespective of
the product/sector and turnover of international business.

The list of MCCIA, Pune has the total number of 2681 Exporters and Importers.
However, the list includes Exporters and Importers from the places other than Pune as
well as some of them belong to non-merchandise that is service sector.
Given the context of merchandise trade aspect focused by the researcher, to arrive
at correct sample frame it was considered necessary to eliminate traders indulging into
non-merchandise transactions from the representative samples. Also in view of the
fact that researcher has opted for judgment sampling with a criteria of easy
accessibility, traders having their business location out of Pune city are also
eliminated while arriving at the sample frame.
Thus, size of the sample frame is reduced to 1800 as shown below.

6.1.2.a Table Showing Sample Units spread across the cities.

Sr. No. Sample Units Belonging to Number

01 Units in Ahmedabad 01

02 Units in Ahmednagar 26

03 Units in Akluj 01

04 Units in Amrawati 01

05 Units in Aurangabad 17

06 Units in Banglore 02

07 Units in Baramati 02

08 Units in Beed 01

09 Units in Chennai 01

10 Units in Goa 01

11 Units in Jalgaon 05

12 Units in Jalna 01

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Sr. No. Sample Units Belonging to Number

13 Units in Kolhapur 18

14 Units in Kolkata 01

15 Units in Latur 02

16 Units in Mumbai 20

17 Units in Nagpur 01

18 Units in Nashik 04

19 Units in Ratnagiri 01

20 Units in Sangli 19

21 Units in Satara 51

22 Units in Solapur 04

23 Units in Thane 04

24 Total Blank fields of the data 06

25 Units in and around Pune 2484

Total 2681

The Units in and around Pune as derived from above table are 2484 of which units
operating outside Pune along with units engaged in service based activities i.e. non
merchandise are eliminated to arrive at sample frame.

6.1.2.b Table Showing Computation of Total Merchandise Units:

Total Units 2681

Less: Units Located outside Pune but within Maharashtra State -197

Units in and around Pune 2484

Less: Non Merchandise Units 684

Merchandise Units 1800

Sample Frame 1800

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From the sample frame arrived above, in order to determine the representative Sample
Size the researcher has used authentic Sample Size Calculator with the help of Krejcie
and Morgan Table as under .

Table for determining Sample Size for Known Population as per Krejcie and Morgan

N (Population) S (Sample Size)

Net Population after giving effect of traders operating outside Representative
Pune and traders indulging into non merchandise deals

1800 317
Source:http://www.kenpro.org/sample-size-determination-using-krejcie-and-morgan-table/

The researcher considered the above sample size for administering specially
designed questionnaire to elicit their responses which served as a “Primary Data”.

6.1.3 Data Collection:

In order to develop the insight into the Objectives and Hypothetical

statements of the study, it was thought necessary to collect secondary as well
as primary data.

a) Primary Data: As explained above the Primary Data is sourced from

Traders in Pune dealing in Merchandise Trade Transactions.
b) Secondary Data: The secondary data is sourced from various websites
like WTO, ICC, RBI, Research Papers, Textbooks, Economic Survey
Reports issued by Government of India.

In addition to above the researcher has reviewed and analyzed forty

two cases to gain more insight into operational part in trade settlement
process. The cases are obtained from the bankers dealing in cross border
trade transactions. The exploration process carried out on the basis of such
insight stimulating cases helped the researcher to analyses the research
problem more comprehensively.

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6.2 Questionnaire Design:

To the representative sample so chosen comprising of Parties to the

trade i.e. Importers and Exporters a specially designed questionnaire is
administered. The design of the questionnaire is such that would enable
researcher to address and probe more into the research problem.

The questions incorporated are such, that would enable researcher to

elicit information relating to Organizational , Operational and Policy aspects
of the Cross Border Trade Transactions and which will make the data
collection utmost relevant and suitable for the purpose of data analysis. The
nature of questions set is “Open and Close ended” as well as “Scale and
Ranking” based questions.

The Primary data has been collected through administering the

questionnaire to the respondents who are either Sole Proprietors or
Entrepreneurs (Importer/Exporter), or Corporate Managers dealing in
International Trade irrespective of the scale and sector. However in order to
expedite the data collection process, use of internet was made.

The questionnaire designed for the bankers enabled researcher to elicit

opinion and experience of bankers in operational aspect of cross border trade
dealings. The questionnaire so designed is administered to five authorized
dealers who are full-fledged foreign exchange centers.

It was not really considered necessary to administer questionnaire to

all nationalized banks in vicinity for the obvious reason that only selected
branches are authorized foreign exchange dealers. Hence the five bankers
listed below are representative of all banks dealing in forex business.
Moreover these banks are governed by same set of Exchange Control
Regulations and foreign trade policy published by government. Also ICC
guidelines in the form of UCPDC are equally applicable to representative

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sample banks as they are applicable to all banks dealing in forex business. The
list of the bankers to whom questionnaire administered is as shown below:

I. Bank of Maharashtra Overseas Branch F.C. Road Pune

II. State Bank of India, Deccan Gymkhana Branch
III. State Bank of India Treasure office station Road, Pune
IV. Bank of India M.G. Road Branch Pune
V. Sarswat Bank Karve Road, Pune
VI. Bank of Maharashtra Deccan Gymkhana Pune
Out of above six Authorized Dealers of five Banks dealing in forex business,
the researcher could elicit information from total 35 respondents i.e. bankers from
each of the above authorized dealers.

6.3 Composition of Questionnaire:

Part Coverage

Part A Profile of the Respondent

Part B Profile of the Organization/Company/Firm

Part C Operational

Part D Related to Documentary Credit

Part E Policy Related

Part A: The questions incorporated herein enabled researcher to elicit

information related to Profile of the Respondent i.e. a) Name, b) Designation,
c) Experience in International Trade d) Contact details (Email Id and Contact
Number.)

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Part B: The questions incorporated herein enabled researcher to elicit

information related to Profile of the Organization i.e. a) Name, b) Year of
Establishment, c) Type of Company, d) Sector e) Products imported/ Exported,
f) Trend of their International Business as compared to Domestic Business.

The questions incorporated in Part A and B enabled researcher about the

organizational details and type of the commodity transacted and the duration
since cross border trade transactions are entered into by the company.

Part C: The questions incorporated herein enabled researcher to elicit

information related to a) Factors weighing most towards delay in Trade
Settlement, b) Factors providing basis for Selection of Method, c) Frequently
opted Trade Settlement Method/s, d) Reasons for frequently opting nay of the
Particular Method, e) Limitations of Available Trade Settlement Method. f)
Mechanism if any developed by the Firm for Section of Trade Settlement
Method. g) Ranking of Methods on the Payment Assurance and Performance
h) Hiring of Consultancy Services for Selection of Trade Settlement i) Whether
Academic Seminars/Workshops attended j) whether Academic Inputs
Improved the Process of Decision Making.

Part D: The questions incorporated herein enabled researcher to elicit

information related to a) whether excessive reliance is placed on documentary
credit method without comparative Analysis of Methods in general b)
frequency of delay in “Trade Settlement” in the transaction undertaken under
Letter of Credit c) factors are responsible for the delay in Trade Settlement
under Letter of Credit d) Comment on Services extended by the bankers in the
procedural aspects of LC and Other methods e) Comment on Letter of Credit
as widely accepted popular method vis-à-vis other methods
Part C and D enabled researcher to probe into considerations in opting
particular method and operational considerations of documentary credit.

Part E: The questions incorporated in this part enabled researcher to seek

views of parties to the trade towards policies and clauses framed by ICC

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governing cross border trade transactions to a) any specific suggestion or

amendment to the UCP provisions so as to expedite the settlement?

The Part E enabled researcher to study the extent to which external

factors like policy matters influence decision making process of entering into
cross border trade.

Out of total 317 respondents to whom the questionnaire is

administered, the researcher could elicit responses from 308 respondents that
have been presented classified and analyzed in the succeeding Chapter No.
VII.

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