Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236666 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9124
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
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.
Subjects: 
firm-to-firm
buyer-seller
trade
network
random matching
JEL: 
F10
F12
F14
Document Type: 
Working Paper
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