Entrepreneurship in International Trade / James E. Rauch, Joel Watson.

Format:

Book

Author/Creator:

Rauch, James E.

Contributor:

National Bureau of Economic Research.

Watson, Joel.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8708.

NBER working paper series no. w8708

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2002.

Summary:

Motivated by evidence on the importance of incomplete information and networks in international trade, we investigate the supply of 'network intermediation.' We hypothesize that the agents who become international trade intermediaries first accumulate networks of foreign contacts while working as employees in production or sales, then become entrepreneurs who sell access to and use of the networks they accumulated. We report supportive results regarding this hypothesis from a pilot survey of international trade intermediaries. We then build a simple general-equilibrium model of this type of entrepreneurship, and use it for comparative statics and welfare analysis. One welfare conclusion is that intermediaries may have inadequate incentives to maintain or expand their networks, suggesting a rationale for the policies followed by some countries to encourage large-scale trading companies that imitate the Japanese sogo shosha.

Notes:

Print version record

January 2002.