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Intermediation in Foreign Trade: When do Exporters Rely on Intermediaries?

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Author Info
Trabold, Harald (DIW Berlin)
Parvati Trubswetter
Philipp J H Schroder

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Abstract

The paper explores theoretically and empirically why trade intermediaries (TIs) are frequently used as agents for exports to some countries but not to others. We adapt a standard intra-industry trade model with variable export costs (e.g. transport) and fixed export costs (e.g. market access) to include a TI that is able to pool market access cost. From this framework explanatory factors for the TI share in a countryÕs exports are derived and subsequently tested with a new data set based on French customs information. The paper finds that: (i) higher market access costs increase the TI share, (ii) smaller export markets feature a larger TI share, (iii) the TI share is independent from variable (distance-dependent) export costs.

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Publisher Info
Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 206.

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Date of creation: 04 Jun 2003
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Handle: RePEc:ecj:ac2003:206

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Web page: http://www.res.org.uk/society/annualconf.asp
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Related research
Keywords: trade intermediation indirect exports monopolistic competition

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Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
F10 - International Economics - - Trade - - - General
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F15 - International Economics - - Trade - - - Economic Integration
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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  12. North, Douglass C, 1991. "Institutions," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 97-112, Winter. [Downloadable!] (restricted)
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  14. Hsing, You-tien, 1999. "Trading companies in Taiwan's fashion shoe networks," Journal of International Economics, Elsevier, vol. 48(1), pages 101-120, June. [Downloadable!] (restricted)
  15. Zhihao Yu, 2002. "Entrepreneurship and intra-industry trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 127(2), pages 277-290, June. [Downloadable!] (restricted)
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