Export Intermediaries Research Articles

Distribution margins and distribution-oriented FDI: Evidence from China

This paper constructs a new measure of distribution margins that covers more countries than that in the World Input–Output Database. Based on this measure, we develop a set of stylized facts and examine the effect of distribution margins on exporters' distribution-oriented foreign direct investment decision using customs data and foreign direct investment decision data from China. We find that higher distribution margins in destination countries drive exporters to conduct distribution-oriented foreign direct investment. Compared with specialized export intermediaries, manufacturers have a greater incentive to invest in distribution sectors abroad when faced with higher distribution margins.

Import, Export and Trade Intermediaries: What Matters the Most?

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.

The Impact of Intranational Trade Barriers on Exports: Evidence from a Nationwide Vat Rebate Reform in China

It is well known that various forms of non-tariff trade barriers exist within a country. Empirically, it is difficult to measure these barriers as they can take many forms. We take advantage of a nationwide VAT rebate policy reform in China as a natural experiment to identify the existence of these intranational barriers due to local protectionism and study the impact on exports and exporting firms. As a result of shifting tax rebate burden, the reform leads to a greater incentive of the provincial governments to block the domestic flow of non-local goods to local export intermediaries. We develop an open-economy heterogenous firm model that incorporates multiple domestic regions and multiple exporting technologies, including the intermediary sector. Consistent with the model's predictions, we find that rising local protectionism leads to a reduction in interprovincial trade, more inward-looking sourcing behavior of local intermediaries, and a reduction in manufacturing exports. Analysis using micro firm-level data further shows that private companies with greater baseline reliance on export intermediaries are more adversely affected.

The Impact of Intranational Trade Barriers on Exports: Evidence from a Nationwide Vat Rebate Reform in China

It is well known that various forms of non-tariff trade barriers exist within a country. Empirically, it is difficult to measure these barriers as they can take many forms. We take advantage of a nationwide VAT rebate policy reform in China as a natural experiment to identify the existence of these intranational barriers due to local protectionism and study the impact on exports and exporting firms. As a result of shifting tax rebate burden, the reform leads to a greater incentive of the provincial governments to block the domestic flow of non-local goods to local export intermediaries. We develop an open-economy heterogenous firm model that incorporates multiple domestic regions and multiple exporting technologies, including the intermediary sector. Consistent with the model’s predictions, we find that rising local protectionism leads to a reduction in interprovincial trade, more “inward-looking” sourcing behavior of local intermediaries, and a reduction in manufacturing exports. Analysis using micro firm-level data further shows that private companies with greater baseline reliance on export intermediaries are more adversely affected.

Export modes and firms’ adjustments to exchange rate movements

The paper provides novel evidence on the heterogeneous response of exporting firms to exchange rate movements. Italian firm-level trade data by product and destination indeed unveil that adjustments to exchange rate variation substantially differ across export modes. The estimates show that, in the event of a domestic currency appreciation, export intermediaries react by decreasing more their price – and less their export volume – than direct manufacturing exporters; and that the different response of direct exporters and wholesale firms is not driven by firm heterogeneity in size or productivity. By examining the aggregate implications of such micro-level findings, the paper documents that, following an appreciation, aggregate bilateral exports routed through wholesale firms tend to decline by less than total direct exports. Overall, our results suggest that, in addition to facilitating trade, export intermediation may substantially contribute to stabilizing trade patterns across countries.

Knowledge and Export Modes: Which Export Strategy Boosts Firms Knowledge Acquisition?


 
 
 The aim of our research is to investigate whether the choice to export directly versus indirect export plays a role in the level of knowledge acquired by exporting firms. To the best of our knowledge, there is no empirical evidence in this stream of literature and our original contribution consists in considering the outcomes of learning-by-exporting in presence of export intermediaries. Thus, we study whether different export strategies may generate different unobservable productivity premia. In particular, we focused on 25 emerging Countries, and through a machine learning method, we evaluate how the level of knowledge acquired by firms would change if those who chose a specific strategy had instead chosen another one. Our results show that (1) the learning by exporting hypothesis is still valid when firms export indirectly; (2) direct exporters acquire more knowledge than indirect exporters; (3) under the same export strategy, Chinese exporters (direct and indirect) outperform other Asian exporters.
 
 
 

The Effects of Relationship Marketing Competence on Positional Advantage in Export Marketplaces : An Investigation on Korean Manufacturers

Exporters often suffer from cross-national distances and possess insufficient resources such as knowledge of internationalization. These exporters can have a partnership with export intermediaries that possess relationship marketing competence. Few studies, however, have explained export intermediaries’ contribution to exporters’ sustainable success in the export marketplace. The present study aims to identify the effects of relationship marketing competence on positional advantage in export marketplaces. Based crucially on the resource -advantage of competition, the author theorizes key relationships between cross-national distances and positional advantage and the moderating effects of export-intermediaries’relationship marketing competence. This theoretical model was tested using data collected from Korean manufacturers conducting export marketing. The data were analyzed using partial least squares technique. The author emphasizes the importance of partnerships in the context of exporting and contribute to the extension of knowledge on international business and strategic management. This manuscript is concluded with implications for theory and management and provides critical directions for further research given the limitations of the current study.

전문무역상사의 지식기반자원과 국제성과에 관한 탐색적 연구: 동적역량관점

전문무역상사의 지식기반자원과 국제성과에 관한 탐색적 연구: 동적역량관점

Export Intermediaries and Adjustments to Exchange Rate Movements

Building on a heterogeneous-firm model a la Melitz (2003), we propose a theory of intermediaries in international trade which rationalizes the available evidence on both aggregate and firm-level exports as well as their responsiveness to exchange rate movements. We introduce double marginalization for goods traded indirectly, i.e. through intermediaries, and local distribution costs for all exporting firms, either intermediaries or direct exporters. This leads to heterogeneous markups, pricing-to-market and to a lower degree of exchange rate pass-through for goods exported by intermediaries. This result, validated on Italian firm-level trade data, is consistent with productivity sorting in the export mode and with the propensity of high productivity firms to absorb more exchange rate movements in their markups. We also explore how direct and intermediary export ows to a given destination react to exchange rate movements along the extensive margin of adjustment. Consistently with our theory, we find evidence of a larger variation in the overall number of varieties traded along the intermediary channel.

Intensity and diversity of internationalization among small and medium-sized exporters in China

PurposeThis study aims to gauge the interactive effect of export intensity and diversity on export performance among exporters in an emerging economy and explore the moderating effect of export intermediaries on the internationalization–export performance relationship.Design/methodology/approachA survey was undertaken among a convenience sample of small and medium exporters located in Guangdong and Fujian Provinces in South China.FindingsThe results show that intensity and diversity interact negatively with export performance, whereas the use of export agents registered a positive effect. Exporters pursuing a strategy of high export intensity will achieve better performance provided that these exports are concentrated in a few countries. Using export agents can help in enhancing the intensity–performance relationship but not that for diversity–performance.Practical implicationsChinese exporters are advised not to blindly pursue international expansion without regard to their own resources and capabilities. They should try to strike a balance between intensity and diversity and employ external agents when needed.Originality/valueThis research seeks to address the void in the literature on how export intensity and diversity should be balanced to create a positive effect on the performance of exporting ventures in an emerging economy, which is under-addressed in the literature. It is also found that employment of export intermediaries is not always good for export performance.

The study of export intermediary performance determinants

Purpose This paper aims to study the direct and indirect influence of three important intangible resources: export knowledge, negotiation skills and specialisation and trustworthiness on export intermediary performance via the competence to reduce clients’ transaction costs. Design/methodology/approach The study has been provided with the official database of export intermediary firms by the Department of Export Promotion, Ministry of Commerce, Thailand. The samples of 400 export intermediary firms were identified from the 1,486 population firms. The postal questionnaires were sent to sample firms. Ordinary least square regression analysis has been adopted to test the hypotheses of the study. Findings The results indicate that valuable resources of export knowledge, negotiation skills and specialisation and trustworthiness significantly and positively affect both export intermediary performance and the competence to reduce clients’ transaction costs. The competence to reduce clients’ transaction costs partially mediates the relationship between resources and export intermediary performance. Research limitations/implications A “cost-based” perspective needs to be supplemented in future research with a more behavioural approach. Practical implications Export intermediaries must be able to deliver “true added value” to remain a viable organisational form, hence, the intermediaries need ceaselessly to acquire, utilise and develop resources and capabilities in reducing clients’ export-related transaction costs. Social implications From a public policy perspective, gaining more knowledge about the role of export intermediaries can greatly facilitate the export promotion efforts in which most nations’ governments are involved. Originality/value This study is a first attempt to study the mediating effect of the competence to reduce transaction costs, which mediates the relationship between resources and performance of export intermediary.

The role of intermediaries in food export: case evidence from Finland

Purpose This paper examines the role of export intermediaries in the internationalization of small and medium sized companies in Finland. The empirical study focuses on small Finnish food companies that export to German and Chinese markets. Design/methodology/approach The research method of this study is qualitative. Data is collected through semi-structured interviews with six respondents presenting exporting companies and export consultants. Findings The paper provides an empirical contribution to the food internationalization debate. First, the paper discusses the definitions of export intermediaries and their role in export based on the literature. Second, by examining how Finnish food companies experience the role of export intermediaries, the paper contributes to the current discussion on internationalization modes. The empirical results highlight that export companies need transaction-creating services from intermediaries especially when entering physically and culturally distant markets like China. Research limitations/implications Limitations of the research generally relate to the use of a small case sample. Practical implications The paper holds a number of relevant insights for food companies seeking to enter to German and Chinese markets. Identifying the export services needed by small food companies might help export intermediaries and public policy agencies to better focus their supporting initiatives. Originality/value The findings add to the current body of knowledge on the key influence on internationalization modes within the food sector.

Antecedents and Consequences of Export Intermediaries’ Customer Orientation: Conceptualization and Propositional Development

Export Intermediaries involve transactions with exporters and importers, both of which are these intermediaries’ customers. Therefore, dyadic perspectives implicit in conventional theories of customer orientation should be revised to apply to a triadic relationship framework in indirect export contexts. The present manuscript proposes that an export intermediary’s customer orientation consists of summated customer orientation (customer orientation toward both the exporter and importer sides) and asymmetrical customer orientation (customer orientation in favor of the exporter relative to the importer side), and examines the antecedents and outcomes of these orientations. It is posited that importer- (exporter-) side concentration increases summated customer orientation and asymmetrical customer orientation toward exporters (importers). It is also posited that these positive effects are weaker when importers and exporters interact directly versus indirectly and are stronger when the offering prices vary versus remaining stable during negotiations. Finally, it is posited that summated customer orientation increases export intermediaries’ performance by itself and in conjunction with customer concentration, but asymmetrical orientation enhances their performance only interaction with customer concentration.

Intermediaries in International Trade: Products and Destinations

Abstract This paper examines the factors that give rise to intermediaries in exporting and explores the implications for trade volumes. Export intermediaries such as wholesalers serve different markets and export different products than manufacturing exporters do. Wholesalers are more prevalent in markets with higher destination-specific fixed costs and focus on products that are less differentiated, have lower contract intensity, and have large sunk entry costs. Aggregate exports to destinations with high shares of indirect exports are less responsive to changes in the real exchange rate than are exports to markets served primarily by direct exporters.

Key Factors Affecting Positional Advantage of Export Partnerships

Abstract Current economic trends have provided incentives for firms to explore the global competitive landscape, and export-ventures are one of the strategies for developing successful international marketing networks, especially when a firm's resources are limited. Although research suggests that export-ventures are valuable tools for improving performance in the global marketplace, the establishment of such ventures does not automatically guarantee positive results. Export-venture long-term success depends on the development of close partnerships. Despite this importance, few studies have tried to explain export partnership success. This study represents an attempt to understand the key factors that influence export-venture success. The central thesis of this study is that both exporters and export intermediaries play important roles in developing positional advantages for export-ventures. Using resource-advantage theory of competition as an underlying framework, a model is developed that draws on the r...

Structuring dyadic relationships between export producers and intermediaries

How do export producers and intermediaries structure their dyadic relationships? This study examines the factors that guide the behaviour and relationships between export producer and intermediary dyads. We examine both sides of a dyadic transaction and develop an export producer?intermediary behaviour typology by using a grounded theory method through qualitative interviews. We propose three forms of export producer?intermediary dyads based on the degree of information sharing, intensity of price negotiation, level of transaction costs, and partner satisfaction and propensity to export directly. These three forms are as follows: (1) competitive, (2) cooperative and (3) mismatched relationships.

Export channel structure in a newly industrialized economy

Using data from the Hong Kong electronics industry, this paper studies the “make” or “buy” decisions associated with export channel strategies (Peng, Zhou, & York, 2006). Findings show that the integrated channels (the “make” decision in transaction cost theory) play a more important role on exporting than the market governance channels (the “buy” decision, i.e., buying channel services from local export intermediaries). In addition to manufacturers’ integrated channels, from the buyers’ standpoint, we find two active integrated channels, namely, (1) the buying offices of firms from developed economies which are located in Hong Kong and (2) the regular visiting buyers of firms from developed economies. These two export channels are integrated channels from the buyers’ standpoint. They are not found in the export distribution structure of developed economies. This paper explains the development and the importance of these buyers’ channels in newly industrialized economies. It also examines the similarities and dissimilarities of export behavior between manufacturing firms in developed and newly industrialized economies, using Hong Kong as an example.

An Explorative Study of the Relationship of Export Intermediaries and Their Trading Partners

Much research has been done on how export intermediaries can help producers and manufacturers penetrate international markets, reduce costs, and increase sales volume and profitability. Little research, however, has been done on the factors that affect the relations between intermediaries and their exporter clients and of either the factors that drive exporters to end their relationship with an export intermediary or impede such actions. Lack of trust was the most common reason provided by exporters for being dissatisfied with their current export intermediary. Intensive analysis of published research and an extensive industry-wide survey revealed that intermediaries can best improve their relations with exporters, and thereby increase the length of the relationship, by increasing trust through more direct and honest dialogue and more transparent operations. The study also shows that the size, sales, and experience of exporters are also significant factors when considering terminating this relationship.

Does Information Technology Provide Competitive Advantage And Improve Performance? An Empirical Study Of Trading Companies In Brazil

Growing investment in information technology applications creates a need to understand the proper integration of these tools into strategic decision making of the firm. This study discusses the impact of global information and communication technologies on competitiveness and performance of Brazilian trading companies. Using resource based theory as a starting point, we examine how information technology, as an internal resource, can provide competitive advantage and what impact information technology produces on competitiveness of Brazilian export intermediaries. The study implements a replicable model (CAPITA) developed by Sethi and King (1994), to investigate these relationships in the emerging market of Brazil. The empirical findings reveal that superior export performance depends on the ability of managers to interpret and utilize some CAPITA dimensions that have a strong relationship with the trading company’s performance. The results corroborate previous research confirming that information technology application has a strong impact on performance. This research extends previous work on this topic within the North American hemisphere, to the South American hemisphere. The development of a strong network of export intermediaries in the emerging market of Brazil can be enhanced by a better understanding of the impact of technology applications, and corresponding government policies endorsing growth.

Determinants of export intermediaries' service‐mix configurations

PurposeThe main objective of the study is to classify export intermediaries (EIs) on the basis of their service offering and to understand how they adjust the composition of their service‐mix to a number of internal and external contingencies.Design/methodology/approachA set of hypotheses were developed and tested on data collected from a random sample of British EIs through a postal survey. Cluster analysis was used to classify EIs on the basis of their service‐mix composition, whereas multinomial logit and multivariate analysis of variance were used to test the main hypothesis.FindingsResults showed the existence of three types of EIs: full‐service provider (FSP) EIs; transaction creator EIs; and physical fulfiller EIs. Transaction creator EIs are the smallest group of the three and FSP EIs, the largest. The composition of the service mixes of these EIs is influenced by the number of countries served; physical presence to foreign markets; distance of the foreign markets and the extent to which an EI takes title of the goods. Specifically, results showed that “full service” EIs tend to be physically present in foreign markets, to serve more countries, and to serve geographically distant markets.Research limitations/implicationsThe main limitation of the study is that it provides evidence from only one country and results may not apply in other contexts. Thus future research, on a different context is desirable and it should take into account additional factors that affect the provision and configuration of EI services. The quality of the offered services is an important issue that was not examined by this study. Different types of EIs are likely to be linked with different levels of service quality as well as service assortment. It would be interesting in the future to examine the possible determinants of EI service quality as well as the existence of trade‐offs between service quality and service assortment.Practical implicationsPractical implications can be drawn for both the EIs as well as the current or potential users of EI services. The study offers guidelines to EIs on how to adjust their service offering to the characteristics of their external and operational environment. The result of the study helps the users and potential users of EI services to identify the types of EIs that can match better their needs and objectives.Originality/valueFirst, it provides a systematically derived and practically useful classificatory scheme of EIs on the basis of services. Second, it examines an extended number of contingencies integrated in a conceptual framework that jointly influence an EIs service offering.