Intermediaries in international trade: direct versus indirect modes of export

Bernard, Andrew B., Grazzi, Marco and Tomasi, Chiara (2012) Intermediaries in international trade: direct versus indirect modes of export. CEP Discussion Papers (CEPDP1137). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

This paper examines the factors that give rise to intermediaries in exporting and explores the implications for trade volumes. Export intermediaries such as wholesalers serve different markets and export different products than manufacturing exporters. In particular, high market-specific fixed costs of exporting, the (lack of) quality of the general contracting environment and product- specific factors play important roles in explaining the existence of export intermediaries. These underlying differences between direct and intermediary exporters have important consequences for trade flows. The ability of export intermediaries to overcome country and product fixed costs means that they can more easily respond along the extensive margin to external shocks. Intermediaries and direct exporters respond differently to exchange rate fluctuations both in terms of the total value of shipments and the number of products exported as well as in terms of prices and quantities. Aggregate exports to destinations with high shares of indirect exports are much less responsive to changes in the real exchange rate than are exports to countries served primarily by direct exporters.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2012 The Author(s)
Divisions:	LSE
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HF Commerce
JEL classification:	F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L22 - Firm Organization and Market Structure: Markets vs. Hierarchies; Vertical Integration; Conglomerates; Subsidiaries L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production D - Microeconomics > D2 - Production and Organizations > D20 - General
Date Deposited:	21 Feb 2024 14:00
Last Modified:	21 Feb 2024 14:33
URI:	http://eprints.lse.ac.uk/id/eprint/121916

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