Greasing the wheels of international commerce: how services facilitate firms’ international sourcing

Authors


  • Debaere is also affiliated with CEPR. Görg is also affiliated with Department of Economics, University of Kiel, GlobID at Aarhus School of Bussiness, and CEPR, Raff is also affiliated with Kiel Institute for the World Economy and CESifo. The paper was started while Peter Debaere visited the Kiel Institute for the World Economy. The authors benefited from suggestions by Giorgio Barba Navaretti, Ed Davis, Peter Egger, Mary Lovely, James Harrigan, John McLaren, Gal Raz, and audiences at various conferences and workshops. Peter Debaere benefited from support by the Darden Foundation. Holger Görg gratefully acknowledges financial support through the European Commission as part of the 7th Framework Programme, Grant Agreement No. 244 552 (SERVICEGAP). Horst Raff acknowledges financial support from the German Science Foundation. Email: debaerep@darden.virginia.edu; holger.goerg@ifw-kiel.de; raff@econ-theory.uni-kiel.de;

Abstract

Abstract We use plant-level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad. We develop a model to generate predictions about how the intensity of international sourcing of materials depends on the availability of services and firm characteristics. These predictions are supported by the data. Greater availability of services across regions, industries, and time increases firms’ foreign sourcing of materials relative to sales. The impact of services differs by firm type. National firms’ sourcing responds to changes in regional service conditions, whereas multinationals tend to be less affected.

Abstract

A l’aide de données au niveau des établissements, on étudie le lien entre la disponibilité locale de services et la décision des entreprises manufacturières de s’approvisionner en biens à l’étranger. On développe un modèle pour engendrer des prédictions quant à savoir jusqu’à quel point l’intensité de l’approvisionnement en biens à l’étranger dépend de la disponibilité des services et des caractéristiques de l’entreprise. Ces prédictions sont supportées par les données. Une plus grande disponibilité de services à travers les régions, les industries et le temps accroît l’approvisionnement en biens à l’étranger des entreprises en pourcentage des ventes. L’impact des services diffère selon le type de firme. L’approvisionnement à l’étranger des entreprises domestiques répond aux variations régionales dans les conditions de service, alors que les entreprises plurinationales tendent àêtre moins affectées.

Ancillary