Innovation in Distribution Channel, Cost Efficiency & Firm Performance: The Case of Indonesian Small & Medium Enterprise Scales
Ferri kuswantoro, M.Mohd Rosli, Radiah Abdul Kader

Abstract
Even though the characteristic of distribution channels once established generally hardly to change(Ramaseshan et al., 1994), they become essential for SMEs export oriented to grow. It has been believed SMEs play crucial parts for generating employment, reducing poverty, adding value and contributing to GDP in most global economy. In spite of the existences literatures, studies on the relationship between distribution channel activities innovations and firm performance, particularly among export-oriented SMEs, are barely found. Using 120 samples collected from agricultural-based industry in Java-Indonesia, the result appeared innovation in distribution channel was positively significant with distribution efficiency, which in turn, improving the overall firm performance. The findings and implications would be grand challenges for SMEs export oriented in Indonesia.

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