Open AccessImport, Export and Trade Intermediaries: What Matters the Most?
Author(s) -
Marco Di Cintio,
Emanuele Grassi,
Claudio Petti
Publication year - 2022
Publication title -
international business research
Language(s) - English
Resource type - Journals
eISSN - 1913-9012
pISSN - 1913-9004
DOI - 10.5539/ibr.v15n4p18
Subject(s) - intermediary , total factor productivity , dominance (genetics) , productivity , industrial organization , logit , stochastic dominance , distribution (mathematics) , business , economics , international economics , international trade , econometrics , marketing , macroeconomics , mathematical analysis , biochemistry , chemistry , mathematics , gene
This paper undertakes a multi-country study to investigate heterogeneity in productivity levels across firms choosing to trade either directly or indirectly through intermediaries, both in the export and import markets. To this end, we implement a stochastic dominance criterion to compare the entire distribution of Total Factor Productivity (TFP) of traders, and we use a generalized ordered logit model to investigate the extent to which a shift in TFP produces a reallocation of firms among different categories of traders. Compared to previous research, our novel findings suggest a productivity sorting of firms which mostly depends on the mode of trade rather than the side. From a policy perspective, our work implies the need to create the conditions for endowing local firms with the necessary knowledge and capabilities to overcome the productivity threshold levels to enter and benefit from direct international trade.