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

Author

Listed:
  • Philipp J. H. Schröder
  • Harald Trabold
  • Parvati Trübswetter

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 country's 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.

Suggested Citation

  • 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.
  • Handle: RePEc:diw:diwwpp:dp336
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gabriel Felbermayr & Benjamin Jung, 2011. "Trade Intermediation and the Organization of Exporters," Review of International Economics, Wiley Blackwell, vol. 19(4), pages 634-648, September.
    2. Guillaume Daudin, 2005. "Les transactions de la mondialisation," Revue de l'OFCE, Presses de Sciences-Po, vol. 92(1), pages 221-262.
    3. Latouche, Karine & Rouviere, Elodie, 2011. "Brokers vs. Retailers: Evidence from the French Imports Industry of Fresh Produce," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114398, European Association of Agricultural Economists.
    4. Jennifer Abel-Koch, 2013. "Who Uses Intermediaries in International Trade? Evidence from Firm-level Survey Data," The World Economy, Wiley Blackwell, vol. 36(8), pages 1041-1064, August.
    5. Krüger, Jens, 2009. "How do firms organize trade?: Evidence from Ghana," Kiel Advanced Studies Working Papers 449, Kiel Institute for the World Economy (IfW).

    More about this item

    Keywords

    trade intermediation; indirect exports; transaction costs; monopolistic competition;

    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; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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