A Simple Model of Buyer-Seller Networks in International Trade

Arbeitspapier

The recent literature on firm-to-firm trade has documented salient empirical regularities of the buyer-seller network. We propose a simplistic re-interpretation of the classical Krugman (1980) model that accounts for surprisingly many of the empirical regularities. This re-interpretation relies on randomized bundling of Krugman-varieties into heterogeneous firms, economically neutral ‘sales units’ that import foreign varieties but belong to local firms, and a statistical reporting threshold that applies to firm-to-firm transactions. We argue that our model provides an important benchmark for the assessment of theoretical models that aim to identify the determinants of firm-to-firm networks.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9124

Classification and Topics

• Classification: Wirtschaft ; Trade: General ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Empirical Studies of Trade
• Subject: firm-to-firm ; buyer-seller ; trade ; network ; random matching

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Herkenhoff, Philipp ; Krautheim, Sebastian ; Sauré, Philip
• Event: Veröffentlichung
• (who): Center for Economic Studies and Ifo Institute (CESifo)
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/236666
• Last update: 10.03.2025, 11:43 AM CET