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Intermediaries, Firm Heterogeneity and Exporting Behaviour
Author(s) -
Lu Jiangyong,
Lu Yi,
Sun Yi,
Tao Zhigang
Publication year - 2017
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12423
Subject(s) - intermediary , productivity , economics , business , work (physics) , monetary economics , international economics , commerce , finance , macroeconomics , mechanical engineering , engineering
In this paper, we present one of the first work on the relation between firm productivity and exporting behaviour in the presence of intermediaries. Using a standard trade framework à la Melitz (2003, Econometrica , 71 , 6, 1695) and Chaney (2009, American Economic Review , 98, 4 , 1707), we find that the most productive firms have sales in the home country and also exporting directly to foreign countries, followed by firms with sales in the home country and exporting both directly and through intermediaries, by firms with sales in the home country and exporting through intermediaries, and finally by firms with sales in the home country only. These theoretical predictions are borne out in a data set of 12,679 firms in 29 developing economies during the 2002–06 period.