Intermediaries, Firm Heterogeneity and Exporting Behaviour

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.

How Does Managerial Experience Predict the Internationalization Type of a Young Firm?

“…In addition, the usage of a more extensive set of variables about the managerse.g., their educational background, past employment other than being an executive, entrepreneurial risk behavior in the pastwould besides resulting in potentially more accurate predictions enable to contribute to the debate about the causal mechanisms of fast internationalization decisions. export literature attitude and marketing variables are more important in differentiating between exporters and nonexporters; exporter groups do not differ significantly from one another but coefficients increase slightly Child et al(2017) [49] literature on international business and business models, resource-based view, transaction cost perspective, institutional and cognitive perspectives the four used factors are able to predict which of the three business models a firm chooses; choices vary by industry and depend on decision-makers' previous experience Ciravegna et al(2019) [50] internationalization literature, entrepreneurship literature initial internationalizer type (entrepreneurial, serendipitous or strategic) affects firms' future export behavior (e.g., becoming a multinational, expanding in the region or exiting from foreign markets) Draz et al (2016) [8] literature on exporting SMEs larger firms, firms registered with original equipment manufacturers, those in industrial clusters, with highly ranked inspection labs and educated personnel are more likely to achieve export success Fletcher (2001) [51] internationalization literature most factors predict inward, outward and, to a smaller extent, also linked internationalization but de-internationalization is motivated by other factors Hessels & Terjesen (2010) [9] resource dependency theory, institutional theory institutional theory explains why firms export, resource dependency theory explains the choice between direct and indirect exporting Landa-Torres et al (2012) [10] literature on firms' international activities; methodological literature the best solution had seven groups of variables of which six groups were significant for predicting export success or failure Lu et al (2014) [11] literature on firms' export behavior pure exporters' productivity is higher than non-exporters' productivity but lower than other exporters' productivity; pure exporters need larger foreign markets compared to their home market Lu et al (2017) [12] literature on intermediaries and foreign trade most productive firms export directly while less productive firms use intermediaries or do not export at all Razzolini & Vannoni (2011) [13] literature on firms' export decisions and productivity direct exporters have higher productivity than indirect exporters; non-exporters' productivity is the lowest; exporters are larger than non-exporters Smith (2005)…”

How Heterogeneous Are the Determinants of Total Factor Productivity in Manufacturing Sectors? Panel-Data Evidence from Vietnam

“…While we expect these determinants to be potentially relevant in the case of enterprises in developing countries, an emerging trend to consider is the heterogeneity of firms as indicated in Dhawan (2001), Castellani and Giovannetti (2010), Cao et al (2017), Kreuser and Newman (2018), Kim (2018), and Ngo and Tran (2020). The heterogeneity of firms is said to be important in the sense that it composes the firms' characteristics (Kim 2018;Lu et al 2017), and this affects the firm's productivity. Heterogeneity can be observed in terms of labor, capital between the large firms and the small ones, and in terms of efficiency between efficient firms and inefficient ones (Jovanovic 1982), and terms of investment decision (Head and Ries 2003).…”

How do firms respond to political tensions? The heterogeneity of the Dalai Lama Effect on trade

“…Third, we follow the literature on the importance of different trade modes in China (e.g., Feenstra and Wei 2010). Trade intermediaries are found to show different trade behaviors when compared to direct traders (Ahn et al 2011;Antràs and Costinot 2011;Lu et al 2011;Head et al 2014;Bernard et al 2015). Following the logic of Ahn et al (2011), political tensions, such as those caused by Dalai Lama meetings, should show up predominantly as decreases in imports by direct traders as they cannot cope with the additional costs of circumventing the import restrictions imposed by government action.…”