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

Harald Trabold, Parvati Trübswetter () and Philipp Schröder
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Harald Trabold: DIW Berlin

No 206, Royal Economic Society Annual Conference 2003 from Royal Economic Society

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 countryÕs 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; monopolistic competition (search for similar items in EconPapers)
JEL-codes: D23 F10 F12 F15 F23 (search for similar items in EconPapers)
Date: 2003-06-04
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