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A replication of "The role of intermediaries in facilitating trade" (Journal of International Economics, 2011)

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Listed:
  • Duan, Jianhua
  • Xuefeng, Qian
  • Das, Kuntal K.
  • Meriluoto, Laura
  • Reed, W. Robert

Abstract

This study replicates Ahn, Khandelwal, and Wei's (AKW 's) (2011) model of intermediary trade. The authors' study produces two main results. First, the authors are able to reproduce empirical evidence for AKW's three main predictions for Chinese exports. This is impressive because much of the data for their replication are independently sourced. However, when they subject AKW's model to additional tests, they find that the evidence is not robust. Using more recently available data to test AKW's first prediction, the authors estimate coefficients that are wrong-signed and significant. When they re-analyze the evidence supporting AKW's second and third predictions, they find that the full sample results mask significant heterogeneity across Chinese regions. In many cases, key coefficients are insignificant. In a few cases, they are wrong-signed and significant. Finally, using multiple versions of a key variable measuring the number of required import documents by country, they discover that the results are not robust across versions.

Suggested Citation

  • Duan, Jianhua & Xuefeng, Qian & Das, Kuntal K. & Meriluoto, Laura & Reed, W. Robert, 2019. "A replication of "The role of intermediaries in facilitating trade" (Journal of International Economics, 2011)," Economics Discussion Papers 2019-66, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwedp:201966
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    References listed on IDEAS

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    1. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2010. "Wholesalers and Retailers in US Trade," American Economic Review, American Economic Association, vol. 100(2), pages 408-413, May.
    2. Daniel F. Spulber, 1996. "Market Microstructure and Intermediation," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 135-152, Summer.
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    4. Kala Krishna & Yelena Sheveleva, 2017. "Wheat or Strawberries? Intermediated Trade with Limited Contracting," American Economic Journal: Microeconomics, American Economic Association, vol. 9(3), pages 28-62, August.
    5. Robert C. Feenstra & Gordon H. Hanson, 2004. "Intermediaries in Entrepôt Trade: Hong Kong Re‐Exports of Chinese Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(1), pages 3-35, March.
    6. Bernard, Andrew B. & Jensen, J. Bradford & Redding, Stephen & Schott, Peter K., 2010. "Wholesalers and retailers in U.S. trade (Long Version)," LSE Research Online Documents on Economics 48896, London School of Economics and Political Science, LSE Library.
    7. Sandra Poncet & Meina Xu, 2018. "Quality screening and trade intermediaries: Evidence from China," Review of International Economics, Wiley Blackwell, vol. 26(1), pages 223-256, February.
    8. Meina Xu & Sandra Poncet, 2018. "Quality Screening and Trade Intermediaries: Evidence from China," PSE-Ecole d'économie de Paris (Postprint) halshs-01631646, HAL.
    9. Ahn, JaeBin & Khandelwal, Amit K. & Wei, Shang-Jin, 2011. "The role of intermediaries in facilitating trade," Journal of International Economics, Elsevier, vol. 84(1), pages 73-85, May.
    10. Dasgupta, Kunal & Mondria, Jordi, 2018. "Quality uncertainty and intermediation in international trade," European Economic Review, Elsevier, vol. 104(C), pages 68-91.
    11. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    12. Sandra Poncet & Meina Xu, 2018. "Quality screening and trade intermediaries: Evidence from China," Review of International Economics, Wiley Blackwell, vol. 26(1), pages 223-256, February.
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    More about this item

    Keywords

    intermediaries; exports; productivity; heterogeneous firms; China;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

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