Review of World Economics

, Volume 152, Issue 2, pp 251–281 | Cite as

Indirect exporters and importers

Original Paper
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Abstract

This paper analyses the relation between firms’ productivity and the different modes of participation in international trade. In particular, it accounts for the possibility that firms can not only export their products, but also internationally source their inputs, either directly or indirectly. Using a cross section of firm level data for several advanced and developing economies, the study confirms the productivity-sorting prediction according to which domestic firms are less efficient than those that resort to an export intermediary, while the latter are less productive than producers which export directly. We show that the same sorting exists on the import side. By considering firms involved in both exporting and importing activities, we also find that direct two-way traders are on average more productive than firms trading indirectly on one of the two trade sides. The latter are in turn more efficient than indirect two-way traders. Finally, we investigate the effects of source-country characteristics on the sorting of firms into different modes of international trade.

Keywords

Heterogeneous firms Direct and indirect exports Direct and indirect imports Two-way traders Intermediation 

JEL Classification

F14 D22 L22 

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Copyright information

© Kiel Institute 2016

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of BolognaBolognaItaly
  2. 2.Department of EconomicsUniversità degli Studi di TrentoTrentoItaly
  3. 3.LEMScuola Superiore S.AnnaPisaItaly

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