Private Labels and International Trade: Trading Variety for Volume
This paper explores the role of pooled-producer, e.g. private label, trade intermediation n shaping the range and diversity of exports. Direct sales maintain a firm's unique product characteristics (`brand equity'), whereas trade through an intermediary can take two forms--either a wholesaling arrangement that (also) maintains the exporter's unique brand but imposes a higher marginal cost (via double marginalization), or a `private label' contract under which the firm's product is pooled with other rms' output and re-sold under a new private label brand created by the intermediary. This paper focuses on the latter, and shows that the availability of the private label option results in greater total export volumes and lower average prices for consumers, but fewer independent varieties available in equilibrium. Welfare implications are mixed: consumers trade variety for volume, firms face greater competition from the new pooled-products, and intermediaries capture much of the gains from trade.
|Date of creation:||Feb 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (618) 8303 5540
Web page: http://www.economics.adelaide.edu.au/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bernard, Andrew B. & Jensen, J Bradford & Redding, Stephen J. & Schott, Peter K., 2010.
"Wholesalers and Retailers in US Trade (Long Version),"
CEPR Discussion Papers
7642, C.E.P.R. Discussion Papers.
- Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2010. "Wholesalers and Retailers in U.S. Trade (Long Version)," NBER Working Papers 15660, National Bureau of Economic Research, Inc.
- Andrew B. Bernard & J. Bradford Jensen & Stephen Redding & Peter K. Schott, 2010. "Wholesalers and retailers in U.S. trade (Long Version)," LSE Research Online Documents on Economics 48896, London School of Economics and Political Science, LSE Library.
- Andrew B. Bernard & J. Bradford Jensen & Stephen Redding & Peter K. Schott, 2010. "Wholesalers and Retailers in U.S. Trade (Long Version)," CEP Discussion Papers dp0968, Centre for Economic Performance, LSE.
- Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2012. "Wholesalers and Retailers in U.S. Trade (Long Version)," Working Papers 12-03, Center for Economic Studies, U.S. Census Bureau.
- Iacovone, Leonardo & Javorcik, Beata & Keller, Wolfgang & Tybout, James R, 2011.
"Supplier Responses to Wal-Mart's Invasion in Mexico,"
CEPR Discussion Papers
8540, C.E.P.R. Discussion Papers.
- Iacovone, Leonardo & Javorcik, Beata & Keller, Wolfgang & Tybout, James, 2015. "Supplier responses to Walmart's invasion in Mexico," Journal of International Economics, Elsevier, vol. 95(1), pages 1-15.
- Leonardo Iacovone & Beata Smarzynska Javorcik & Wolfgang Keller & James R. Tybout, 2011. "Supplier Responses to Wal-Mart's Invasion of Mexico," NBER Working Papers 17204, National Bureau of Economic Research, Inc.
- Gabrielsen, Tommy Staahl & SÃ¸rgard, Lars, 2000.
"Private Labels, Price Rivalry, and Public Policy,"
University of California at Santa Barbara, Economics Working Paper Series
qt8wh900ks, Department of Economics, UC Santa Barbara.
- 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.
- Felbermayr, Gabriel J. & Jung, Benjamin, 2008. "Trade intermediaries, incomplete contracts, and the choice of export modes," Tübinger Diskussionsbeiträge 317, University of Tübingen, School of Business and Economics.
- Bergès-Sennou Fabian & Bontems Philippe & Réquillart Vincent, 2004. "Economics of Private Labels: A Survey of Literature," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-25, February.
- Head, Keith & Jing, Ran & Swenson, Deborah L., 2014.
"From Beijing to Bentonville: Do multinational retailers link markets?,"
Journal of Development Economics,
Elsevier, vol. 110(C), pages 79-92.
- Keith Head & Ran Jing & Deborah L. Swenson, 2010. "From Beijing to Bentonville: Do Multinational Retailers Link Markets?," NBER Working Papers 16288, National Bureau of Economic Research, Inc.
- Emek Basker & Pham Hoang Van, 2008.
"Imports "R" Us: Retail Chains as Platforms for Developing-Country Imports,"
0804, Department of Economics, University of Missouri, revised 12 Aug 2008.
- Emek Basker & Pham Hoang Van, 2010. "Imports "Я" Us: Retail Chains as Platforms for Developing-Country Imports," American Economic Review, American Economic Association, vol. 100(2), pages 414-18, May.
- Mills, David E, 1995. "Why Retailers Sell Private Labels," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(3), pages 509-28, Fall.
- Kunal Dasgupta & Jordi Mondria, 2012. "Quality Uncertainty and Intermediation in International Trade," Working Papers tecipa-462, University of Toronto, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:adl:wpaper:2013-01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dmitriy Kvasov)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.