Speaker: Amit K. Khandelwal, Columbia Business School and NBER
(joint with JaeBin Ahny, Columbia University and Shang-Jin Wei, Columbia Business School and NBER)
Abstract: This paper documents that intermediaries play an important role in facilitating international trade. 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 using the firm-level census of China's trade, and generate new facts regarding the activity of intermediaries.