Abstract
Indirect exporters are defined as firms exporting through a trade intermediary. These firms have received rapidly expanding empirical and theoretical attention recently. I show that in Eastern Europe and Central Asia these firms do, as predicted by the theoretical literature, lie between domestic firms and direct exporters for a range of performance measures. Multi-product firms, despite their generally higher productivity, are shown to be more likely to use intermediaries than single-product firms, suggesting that “mixed exporting strategies” that use intermediaries are important for these firms. Analysis using a small panel subsample of the data suggests the sunk costs of indirect exporting are significantly lower than those for direct exporting, pointing to a role for intermediaries in “greasing the wheel” of entry to export markets.
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Notes
Ahn et al. (2011) find that intermediaries account for 20% of Chinese exports in 2005. Blum et al. (2010) report that around 35% of imports into Chile from Argentina are mediated through wholesalers, with 6% through retailers. Akerman (2010) shows that in Sweden in 2005, roughly half of firms exporting goods were wholesalers, while these wholesalers accounted for 15% of export volume. Bernard et al. (2010a) show that in Italy, 27% of manufacturing exporters are wholesalers, accounting for 11% of export volume in 2003. Crozet et al. (2010) show that wholesalers account for 20% of French exports in 2010. Felbermayr and Jung (2011) show at industry level for the US that the ratio of exports to intermediaries over exports to foreign affiliates is almost always larger than one, and often by orders of magnitude. Bernard et al. (2010b) show that in the US, “mixed wholesaler-retailers”, i.e. firms with more than 75% of output in those categories, account for two thirds of US exports in 2002.
see Albornoz et al. (2010) for a detailed depiction of how uncertain firms enter export markets.
Garments is found to have the lowest output per worker of all sectors in Table 13. Textiles, on the other hand, exhibits average levels of productivity according to this measure.
Previous literature suggests that firms will use intermediaries more intensively when exporting to markets with higher fixed costs. A lack of data on either the products exported or the destination market prohibits any analysis of this issue in this paper.
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Appendix A: Supplementary Tables
Appendix A: Supplementary Tables
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McCann, F. Indirect Exporters. J Ind Compet Trade 13, 519–535 (2013). https://doi.org/10.1007/s10842-012-0133-x
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DOI: https://doi.org/10.1007/s10842-012-0133-x