Intermediaries, Firm Heterogeneity and Exporting Behaviour

24 Pages Posted: 12 Jul 2017

See all articles by Jiangyong Lu

Jiangyong Lu

Peking University

Yi Lu

National University of Singapore (NUS)

Yi Sun

Formerly Known as Shanghai Institute of Foreign Trade

Zhigang Tao

The University of Hong Kong - School of Business

Date Written: July 2017

Abstract

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.

Suggested Citation

Lu, Jiangyong and Lu, Yi and Sun, Yi and Tao, Zhigang, Intermediaries, Firm Heterogeneity and Exporting Behaviour (July 2017). The World Economy, Vol. 40, Issue 7, pp. 1381-1404, 2017. Available at SSRN: https://ssrn.com/abstract=3000641 or http://dx.doi.org/10.1111/twec.12423

Jiangyong Lu

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Yi Lu (Contact Author)

National University of Singapore (NUS) ( email )

Bukit Timah Road 469 G
Singapore, 117591
Singapore

Yi Sun

Formerly Known as Shanghai Institute of Foreign Trade

No. 1900, Wenxiang Road
Shanghai, 201620
China

Zhigang Tao

The University of Hong Kong - School of Business ( email )

Meng Wah Complex
Pokfulam Road
Hong Kong
China
(852) 2857-8223 (Phone)
(852) 2858-5614 (Fax)

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