"Quality Screening and Trade Intermediaries: Evidence from China,"
CEPII Working Paper 2015- 20 , October 2015 , CEPII.
We examine the quality-screening role played by intermediaries in international trade, exploiting export data at the product level for Chinese exporters. We uncover substantial heterogeneity among intermediaries, and distinguish two kinds: generalized and specialized intermediaries. We find strong evidence of a quality-verification role for specialized intermediaries: they are more prevalent in products with greater quality dispersion among local exporters and export goods of higher quality than do generalized intermediaries. Our results suggest that specialized intermediaries have the capacity to reduce the incidence of quality problems.
Intermediaries ; International Trade ; Quality screening ; Product differentiation ; China