The Role of Intermediaries in Facilitating Trade

By JaeBin Ahn, Amit K. Khandelwal, Shang-jin Wei. 2011

741 citations recorded by the source corpus.

We provide systematic evidence that intermediaries play an important role in facilitating trade using a firm-level the census of China's exports. Intermediaries account for around 20% of China's exports in 2005. This implies that many firms engage in trade without directly exporting products. We modify a heterogeneous firm model so that firms endogenously select their mode of export - either directly or indirectly through an intermediary. The model predicts that intermediaries will be relatively more important in markets that are more difficult to penetrate. We provide empirical confirmation for this prediction, and generate new facts regarding the activity of intermediaries.

Subfields: Economics and Econometrics, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/6e2221391619e53e9461ec455277ebf1499425da

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Finance

In Strategy and Management

Citations in the corpus

Intermediaries in International Trade: direct versus indirect modes of export (2010, positive): “As found by Ahn et al. (2010) and Akerman (2010), these measures of market access costs are positively and significantly related to intermediary trade shares.”
Landing the First Job: The Value of Intermediaries in Online Hiring (2016, neutral): “Some literature suggests that intermediaries exist in international trade to reduce the fixed costs associated with market entry or searching for trading partners (Ahn et al., 2011, among others).”
The Empirics of Firm Heterogeneity and International Trade (2012, methodology): “Using Chinese trade transaction data, Ahn et al. (2011) consider a di erent de nition of intermediaries based on rms having the English-equivalent meaning of importer, exporter, and/or trading in their name.”
Growing like China: Firm performance and global production line position (2020, neutral): “Global value chains (GVCs) have fundamentally transformed international trade and development in recent decades (Baldwin, 2016; Antràs, 2021; World Development Report, 2020).”
Firm Exports and Multinational Activity Under Credit Constraints (2011, positive): “17 Since the data do not directly flag trade intermediaries, we follow standard practice and use keywords in firm names to identify them (Ahn et al. 2011).”
How Firms Export: Processing vs. Ordinary Trade with Financial Frictions (2016, neutral): “11 Since the data do not directly flag trade intermediaries, we follow standard practice and use keywords in firm names to identify them (Ahn et al., 2011).”
Carry-Along Trade (2012, background): “(2010a), Ahn et al. (2011), Akerman (forthcoming) and Bernard et al. (2015); in these papers, manufacturing firms either export directly or through a non-manufacturing intermediary. (12)An exception is Iacovone and Javorcik (2010) who consider both production and exports in Mexico.”
VAT Rebates and Export Performance in China: Firm-level Evidence (2013, background): “8 Some Chinese firms export through intermediaries or trading firms, and these trading firms accounted for about 20% of the total exports in China in 2005 (Ahn et al., 2011).”