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Search-theoretic Approach to Securing New Suppliers: Impacts of Geographic Proximity for Importer and Non-importer


  • Tomohiro MACHIKITA

    (Inter-disciplinary Studies Center, Japan External Trade Organization)

  • Yasushi UEKI

    (Bangkok Research Centre- Japan External Trade Organization, Thailand)


This paper empirically examines whether firms consider geographic proximity as they seek for a new supplier. While addressing the difference between importers and non-importers, we estimate the effects of geographic proximity on the dynamic process of procurement, using survey data gathered from manufacturing firms in Indonesia, Thailand, and Vietnam. We find that the firms procuring intermediate goods from nearby suppliers and locally owned firms are more likely to form new trade relationships with suppliers. The more sensitive they are about the geographic proximity of their suppliers, the more likely it is that locally dependent firms will seek out new sources of supply of raw materials. This relationship disappears for firms which import some of their inputs.

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  • Tomohiro MACHIKITA & Yasushi UEKI, 2010. "Search-theoretic Approach to Securing New Suppliers: Impacts of Geographic Proximity for Importer and Non-importer," Working Papers DP-2010-02, Economic Research Institute for ASEAN and East Asia (ERIA).
  • Handle: RePEc:era:wpaper:dp-2010-02

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    References listed on IDEAS

    1. Fontagné, Lionel & Mitaritonna, Cristina, 2013. "Assessing barriers to trade in the distribution and telecom sectors in emerging countries," World Trade Review, Cambridge University Press, vol. 12(01), pages 57-78, January.
    2. Andriamananjara, Soamiely & Dean, Judith M. & Feinberg, Robert & Ferrantino, Michael J. & Ludema, Rodney & Tsigas, Marinos E., 2004. "The Effects of Non-Tariff Measures on Prices, Trade, and Welfare: CGE Implementation of Policy-Based Price Comparisons," Working Papers 15863, United States International Trade Commission, Office of Economics.
    3. Jaffee, Steven & Henson, Spencer, 2004. "Standards and agro-food exports from developing countries: rebalancing the debate," Policy Research Working Paper Series 3348, The World Bank.
    4. KIMURA Fukunari & CHEN Lurong & ILIUTEANU Maura Ada & YAMAMOTO Shimpei & AMBASHI Masahito, 2016. "TPP, IPR Protection, and Their Implications for Emerging Asian Economies," Working Papers PB-2016-02, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Beghin, John C. & Disdier, Anne-Celia & Marette, Stephan & van Tongeren, Frank, 2011. "Measuring Costs And Benefits Of Non-Tariff Measures In Agri-Food Trade," Staff General Research Papers Archive 32393, Iowa State University, Department of Economics.
    6. Fukunari Kimura & Lurong Chen, 2017. "E-Commerce as Asia's New Growth Engine," Working Papers PB-2017-02, Economic Research Institute for ASEAN and East Asia (ERIA).
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    Cited by:

    1. Kimura, Fukunari & Obashi, Ayako, 2011. "Production Networks in East Asia: What We Know So Far," ADBI Working Papers 320, Asian Development Bank Institute.

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