Growing evidence suggests that a large share of international trade transactions are made through intermediaries and that whether firms use them or not depends on different factors. The aim of this paper is to empirically investigate if credit constraints introduce a degree of difference among firms in their mode of importing. Building on the intuition provided by a simple theoretical framework, we use firm-level data from 66 developing and developed countries to test the possible links between credit constraints and reliance on import intermediaries. Our results show that indeed credit-constrained firms exhibit a higher probability of importing their inputs using an intermediary, while unconstrained firms are more likely to import directly. Our results also provide some evidence that the impact of credit constraints on the probability of indirect importing is amplified for firms with a higher distance from their international sourcing network. Moreover, if firms face other types of frictions to import, then the probability that credit-constrained firms rely on intermediaries is estimated to be higher. Remarkably, credit rationing affects the probability of indirect importing no matter what the mode of exporting is.

Intermediated trade and credit constraints: The case of firm's imports / Nucci, F.; Pietrovito, F.; Pozzolo, A. F.. - In: INTERNATIONAL ECONOMICS. - ISSN 2110-7017. - 175:(2023), pp. 201-220. [10.1016/j.inteco.2023.08.003]

Intermediated trade and credit constraints: The case of firm's imports

Nucci F.
Primo
;
2023

Abstract

Growing evidence suggests that a large share of international trade transactions are made through intermediaries and that whether firms use them or not depends on different factors. The aim of this paper is to empirically investigate if credit constraints introduce a degree of difference among firms in their mode of importing. Building on the intuition provided by a simple theoretical framework, we use firm-level data from 66 developing and developed countries to test the possible links between credit constraints and reliance on import intermediaries. Our results show that indeed credit-constrained firms exhibit a higher probability of importing their inputs using an intermediary, while unconstrained firms are more likely to import directly. Our results also provide some evidence that the impact of credit constraints on the probability of indirect importing is amplified for firms with a higher distance from their international sourcing network. Moreover, if firms face other types of frictions to import, then the probability that credit-constrained firms rely on intermediaries is estimated to be higher. Remarkably, credit rationing affects the probability of indirect importing no matter what the mode of exporting is.
2023
firms’ import mode; trade intermediaries; financial constraints
01 Pubblicazione su rivista::01a Articolo in rivista
Intermediated trade and credit constraints: The case of firm's imports / Nucci, F.; Pietrovito, F.; Pozzolo, A. F.. - In: INTERNATIONAL ECONOMICS. - ISSN 2110-7017. - 175:(2023), pp. 201-220. [10.1016/j.inteco.2023.08.003]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/1688325
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