Discussion paper

DP14123 Learning About Demand Abroad From Wholesalers: a B2B Analysis

This paper uses Business to Business (B2B) transaction level data. It shows that manufacturing firms that initially export via a wholesaler are much more likely to become direct exporters to the same destination in subsequent periods. Theoretically, we rationalize this finding by demonstrating how a connection to a wholesaler reduces uncertainty about the foreign demand. In the data we isolate the channel for demand learning from productivity spillovers. Non-exporting manufacturing firms, previously serving a foreign destination through an exporting wholesaler, have a much higher probability of becoming direct exporters to the same export market in subsequent periods. A connection to an exporting wholesaler results in a probability of exporting to the same destination that is six times higher than a comparable firm without any exposure to the foreign destination.

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Citation

Connell, W, E Dhyne and H Vandenbussche (eds) (2019), “DP14123 Learning About Demand Abroad From Wholesalers: a B2B Analysis”, CEPR Press Discussion Paper No. 14123. https://cepr.org/publications/dp14123