Intermediation in Foreign Trade: When Do Exporters Rely on Intermediaries?

Philipp Schröder, Harald Trabold and Parvati Trübswetter

No 336, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: The paper explores theoretically and empirically why trade intermediaries (TIs) are frequently used as agents for exports to some countries but not to others. We adapt a standard intra-industry trade model with variable export costs (e.g. transport) and fixed export costs (e.g. market access) to include a TI that is able to pool market access cost. From this framework explanatory factors for the TI share in a country's exports are derived and subsequently tested with a new data set based on French customs information. The paper finds that: (i) higher market access costs increase the TI share, (ii) smaller export markets feature a larger TI share, (iii) the TI share is independent from variable (distance-dependent) export costs.

Keywords: trade intermediation; indirect exports; transaction costs; monopolistic competition (search for similar items in EconPapers)
JEL-codes: D23 F10 F12 F15 F23 (search for similar items in EconPapers)
Pages: 20 p.
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Intermediation in Foreign Trade: When do Exporters Rely on Intermediaries? (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp336

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