CATs and DOGs

Carsten Eckel and Raymond Riezman

Journal of International Economics, 2020, vol. 126, issue C

Abstract: There is recent firm level evidence that manufacturing firms export products that they do not produce themselves. Bernard et al., 2019 call this “Carry-Along Trade” (CAT) and show that it is a widespread phenomenon among Belgian manufacturing exports. In this paper, we study why manufacturing firms may decide to have their products carried-along instead of exporting their products themselves. We show that if the “Delivery of Own Goods” (DOG) is an alternative option, the profitability of CAT is determined by demand linkages, productivity and transportation costs. Our focus is on the strategic aspects of CAT, and we illustrate that CAT can produce the same outcome as product-specific, market-specific collusion.

Keywords: Carry along trade; Multi-product firms; Mode of exporting; Collusion (search for similar items in EconPapers)
JEL-codes: F1 L1 L2 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: CATs and DOGs (2020)
Working Paper: CATs and DOGs (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:126:y:2020:i:c:s0022199620300544

DOI: 10.1016/j.jinteco.2020.103338

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