Information costs, networks and intermediation in international trade

No 76, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: This paper is motivated by the observation that intermediaries play an important role in international trade. The matching role of intermediaries is examined in a pairwise matching model with two-sided information asymmetry, where intermediaries develop contacts. Intermediation expands the set of matching technologies available to traders, while convexity in network-building costs with respect to network size gives rise to both direct and indirect trade in equilibrium. The trade pattern depends on the relative responsiveness of the direct and indirect matching technologies to information costs, which for some parameter values generates a non-monotonic relationship between information frictions and trade.

Keywords: International trade; Intermediation (Finance); Mathematical models (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cta, nep-int and nep-net
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Citations: View citations in EconPapers (2)

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https://www.dallasfed.org/-/media/documents/resear ... papers/2011/0076.pdf Full text (application/pdf)

Related works:
Working Paper: Information Costs, Networks and Intermediation in International Trade (2008)
Working Paper: Information costs, networks and intermediation in international trade (2008)
Working Paper: Information Costs, Networks and Intermediation in International Trade (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddgw:76

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