Revisiting Trade Intermediaries: The Role of International Forward Integration — Frank Pisch

Sprecher

Frank Pisch (Technical University of Darmstadt)

Abstract

We argue that the traditional view of intermediaries in international trade should be revised. Using rich French firm-level, customs, ownership, and matched employer-employee data, we document three stylized facts: (1) Affiliates of foreign manufacturing multinationals dominate intermediated trade, (2) charge higher markups, and (3) operate with narrower, more concentrated product portfolios than true intermediaries. While these facts imply lower efficiency and welfare than previously thought, we provide evidence that these firms also import higher-quality goods, employ more skilled workers specialized in customer support, and rely more on intangible capital. The welfare implications are therefore theoretically ambiguous: Higher markups and narrower product scope reduce allocative and productive efficiency, while better product and service quality result in higher productive efficiency.

Autoren

Giuseppe Berlingieri (ESSEC Business School), Sebastian Kimm-Friedenberg (Technical University of Darmstadt), Frank Pisch (Technical University of Darmstadt), Claudia Steinwender (Ludwig Maximilian University of Munich (LMU))

Raum

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