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Wholesalers in International Trade

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Author Info

  • Matthieu Crozet
  • Guy Lalanne
  • Sandra Poncet

Abstract

Recent empirical research in international trade has revealed overwhelming evidence that, in all countries, a remarkably small proportion of firms report exports in Customs statistics. A large share of these are wholesalers. This suggests that the number of firms active in foreign markets might be much greater than that suggested by a simple count of the firms directly reporting their exports. This paper thus sheds light on the role of wholesalers in international trade. Our model, which allows for quality differentiation, uses very general assumptions to show that intermediated exporters may contribute significantly to the extension of countries’ export opportunities. The model predicts a twofold role in international trade. First, wholesalers help less-efficient firms to supply foreign markets, thus increasing the number of exported varieties at the aggregate level. Second, they alleviate the difficulty of reaching less-accessible markets. We use French firm-level export data to provide empirical support for these two predictions.

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Bibliographic Info

Paper provided by CEPII research center in its series Working Papers with number 2010-31.

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Date of creation: Dec 2010
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Handle: RePEc:cii:cepidt:2010-31

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Keywords: Wholesalers; International trade; Intermediated exports; Heterogenous firms; Quality;

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References

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  1. Hallak, Juan Carlos & Sivadasan, Jagadeesh, 2011. "Firms' Exporting Behavior under Quality Constraints," Working Papers 628, Research Seminar in International Economics, University of Michigan.
  2. Johnson, Robert C., 2012. "Trade and prices with heterogeneous firms," Journal of International Economics, Elsevier, vol. 86(1), pages 43-56.
  3. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, MIT Press, vol. 123(2), pages 441-487, 05.
  4. Felbermayr, Gabriel & Jung, Benjamin, 2011. "Trade intermediation and the organization of exporters," Munich Reprints in Economics 20574, University of Munich, Department of Economics.
  5. Martin, Julien, 2012. "Markups, quality, and transport costs," European Economic Review, Elsevier, vol. 56(4), pages 777-791.
  6. Dimitra Petropoulou, 2008. "Information Costs, Networks and Intermediation in International Trade," CEP Discussion Papers dp0848, Centre for Economic Performance, LSE.
  7. Bernard, Andrew B. & Grazzi, Marco & Tomasi, Chiara, 2012. "Intermediaries in International Trade: Direct versus indirect modes of export," CEPR Discussion Papers 8766, C.E.P.R. Discussion Papers.
  8. Fergal McCann, 2013. "Indirect Exporters," Journal of Industry, Competition and Trade, Springer, vol. 13(4), pages 519-535, December.
  9. Akerman, Anders, 2010. "A Theory on the Role of Wholesalers in International Trade based on Economies of Scope," Research Papers in Economics 2010:1, Stockholm University, Department of Economics.
  10. Bernardo S. Blum & Sebastian Claro & Ignatius Horstmann, 2010. "Facts and Figures on Intermediated Trade," American Economic Review, American Economic Association, vol. 100(2), pages 419-23, May.
  11. Matthieu Crozet & Keith Head & Thierry Mayer, 2012. "Quality Sorting and Trade: Firm-level Evidence for French Wine," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 609-644.
  12. Jennifer Abel-Koch, 2011. "Firm Size and the Choice of Export Mode," Working Papers 1105, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 29 Mar 2011.
  13. Shang-Jin Wei & Jaebin Ahn & Amit K. Khandelwal, 2010. "The Role of Intermediaries in Facilitating Trade," Working Papers id:2557, eSocialSciences.
  14. Benjamin R. Mandel, 2010. "Heterogeneous firms and import quality: evidence from transaction-level prices," International Finance Discussion Papers 991, Board of Governors of the Federal Reserve System (U.S.).
  15. Pol Antràs & Arnaud Costinot, 2011. "Intermediated Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1319-1374.
  16. Boumellassa, Houssein & Debucquet, David Laborde & Mitaritonna, Cristina, 2009. "A picture of tariff protection across the World in 2004: MAcMap-HS6, Version 2," IFPRI discussion papers 903, International Food Policy Research Institute (IFPRI).
  17. Julien Martin, 2009. "Spatial Price Discrimination in International Markets," Working Papers 2009-21, CEPII research center.
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Citations

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Cited by:
  1. Michele Imbruno, 2014. "Trade Liberalization, Intermediate Inputs and Firm Efficiency: Direct versus Indirect Modes of Import," Discussion Papers 2014-02, University of Nottingham, GEP.
  2. Horst Raff & Natalia Trofimenko, 2013. "World Market Access of Emerging-Market Firms: the Role of Foreign Ownership and Access to External Finance," Kiel Working Papers 1848, Kiel Institute for the World Economy.
  3. Latouche, Karine & Rouviere, Elodie, 2012. "Brokers vs. Retailers: Evidence from the French Imports Industry of Fresh Produce," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123331, Agricultural and Applied Economics Association.
  4. Jonathan Timmis, 2013. "Internet Adoption and Firm Exports in Developing Economies," Discussion Papers 2013-05, University of Nottingham, GEP.
  5. Angela Cheptea & Charlotte Emlinger & Karine Latouche, 2012. "Multinational Retailers and Home Country Exports," Working Papers 2012-34, CEPII research center.
  6. Marcio Cruz, 2014. "Do Export Promotion Agencies Promote New Exporters?," IDB Publications 85293, Inter-American Development Bank.

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