Monday, May 10, 2021 4:00 PM
Moynihan Institute of Global Affairs
Trade, Development and Political Economy presents
Cutting Out The Middleman: The Structure of Chains of Intermediation
Startz and Matthew Grant
Wholesalers and other
intermediaries play a major role in trade. In survey data from Nigeria, the
authors find that there are on average at least three separate intermediaries
between an international manufacturer and a Nigerian consumer. The authors
model the formation of these chains, and their implications for measurement of
trade costs and consumer welfare across locations within Nigeria. They find
that consumers in entrepôts benefit from indirect demand flowing through their
location, and consumers in end destinations can also benefit from longer chains
of intermediation in some cases. Taking chains into account also suggests that
estimates of distance costs in developing countries are biased upward, and may
contribute less to consumer-producer price gaps than typically thought.
Assistant Professor, Economics
Meredith Startz is an Assistant Professor of Economics at Dartmouth. Her research is at the
intersection of development and trade, and focuses on how contracting problems
shape transactions and firms in developing countries.
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