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Quality Screening and Trade Intermediaries: Evidence from China

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  • Sandra Poncet
  • Meina Xu

Abstract

We examine the quality-screening role played by intermediaries in international trade, exploiting export data at the product level for Chinese exporters. We uncover substantial heterogeneity among intermediaries, and distinguish two kinds: generalized and specialized intermediaries. We find strong evidence of a quality-verification role for specialized intermediaries: they are more prevalent in products with greater quality dispersion among local exporters and export goods of higher quality than do generalized intermediaries. Our results suggest that specialized intermediaries have the capacity to reduce the incidence of quality problems.

Suggested Citation

  • Sandra Poncet & Meina Xu, 2015. "Quality Screening and Trade Intermediaries: Evidence from China," Working Papers 2015-20, CEPII research center.
  • Handle: RePEc:cii:cepidt:2015-20
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    Cited by:

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    2. Hege Medin, 2022. "Why do firms import via merchants in entrepôt countries rather than directly from the source?," Review of International Economics, Wiley Blackwell, vol. 30(3), pages 854-884, August.
    3. Zheng Wang, 2021. "Blame the Foreigners? Exports and Sulfur Dioxide Emissions in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(2), pages 279-309, October.
    4. Duan, Jianhua & Xuefeng, Qian & Das, Kuntal K. & Meriluoto, Laura & Reed, W. Robert, 2020. "A replication of "The role of intermediaries in facilitating trade" (Journal of International Economics, 2011)," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 14, pages 1-30.
    5. Daunfeldt, Sven-Olov & Engberg, Erik & Halvarsson, Daniel & Kokko, Ari & Tingvall, Patrik, 2019. "Wholesale firms: A catalyst for Swedish exports?," Ratio Working Papers 328, The Ratio Institute.
    6. Jianhua Duan & Xuefeng Qian & Kuntal K. Das & Laura Meriluoto & W. Robert Reed, 2019. "Further Tests of Ahn, Khandelwal, and Wei’s (2011) Model of Intermediated Trade," Working Papers in Economics 19/02, University of Canterbury, Department of Economics and Finance.

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    More about this item

    Keywords

    Intermediaries; International Trade; Quality screening; Product differentiation; China;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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