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Who Uses Intermediaries in International Trade? Evidence from Firm-level Survey Data

Authors


  • I am grateful to Pol Antràs, Lisandra Flach, Christina Gathmann, Eckhard Janeba, Volker Nocke, Benjamin Protte, Björn Saß and Klaus Wälde for fruitful discussions and helpful comments. I would also like to thank an anonymous referee and seminar participants at the University of Mainz, the University of Frankfurt, the University of Nottingham, the 2010 Annual Meeting of the European Trade Study Group, the 2011 International Economics Workshop in Göttingen and the 2011 European Economic Association meeting. All errors are mine.

Abstract

The present paper uses data from the World Bank Enterprise Survey conducted in Turkey in 2005 to shed light on the firms that use intermediaries in international trade. It lends robust empirical support to recent theories which suggest that indirect exporters are mostly small firms that are not profitable enough to cover the high fixed costs of building an own distribution network abroad. Manufacturers who develop new products are more likely to use trade intermediaries, as are firms that produce low-quality goods. In contrast, neither foreign ownership nor credit constraints are correlated with the choice of export mode. Moreover, firms that rely on trade intermediaries to sell their goods abroad also do so to source their foreign inputs, implying that the role of intermediaries in facilitating trade may be larger than previous studies suggest.

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