Indirect exports and wholesalers: Evidence from interfirm transaction network data

Daisuke Fujii, Yukako Ono and Yukiko Saito

Japan and the World Economy, 2017, vol. 44, issue C, 35-47

Abstract: A substantial fraction of international trade is facilitated by wholesalers, who enable manufacturers to indirectly export their products to foreign markets. Using large-scale Japanese interfirm transaction network data, this paper investigates the features of both direct and indirect exporters as well as international wholesalers. As predicted by a simple Melitz-type trade model with indirect export alternative, the sorting pattern is confirmed in our data, and the distributions of sales and labor productivity are ordered for direct, indirect, and non-exporters in terms of first order stochastic dominance. Multinomial logit analysis is also consistent with the model, which assumes lower fixed cost and higher marginal cost for indirect exporters compared to direct exporters. We also find that the number of suppliers raises the probability of direct exporting implying a cost sharing mechanism of firms with more suppliers. On the other hand, the number of customers raises the probability of exporting in general (both indirect and direct) implying a higher product appeal and broader demand base for firms who have more customers.

Keywords: Indirect export; Wholesale; Network; Mode of export; Firm heterogeneity (search for similar items in EconPapers)
JEL-codes: F12 F14 F23 L14 L25 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Working Paper: Indirect Exports and Wholesalers: Evidence from interfirm transaction network data (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:44:y:2017:i:c:p:35-47

DOI: 10.1016/j.japwor.2017.11.001

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