Intermediation in Foreign Trade: When do Exporters Rely on Intermediaries?
AbstractThe 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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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 206.
Date of creation: 04 Jun 2003
Date of revision:
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trade intermediation; indirect exports; monopolistic competition;
Other versions of this item:
- Philipp J. H. Schröder & Harald Trabold & Parvati Trübswetter, 2003. "Intermediation in Foreign Trade: When Do Exporters Rely on Intermediaries?," Discussion Papers of DIW Berlin 336, DIW Berlin, German Institute for Economic Research.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-16 (All new papers)
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