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dc.contributor.authorDebaere, Peteren_US
dc.contributor.authorGörg, Holgeren_US
dc.contributor.authorRaff, Horsten_US
dc.description.abstractWe use unique plant-level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad. To guide our empirical analysis we develop a monopolistic-competition model of the materials sourcing decisions of heterogeneous firms. The model generates predictions about how the intensity of international sourcing of materials depends on a firm's productivity and the availability of local services. These predictions are supported by the data. We find evidence that more productive manufacturing firms tend to have a higher ratio of imported materials to sales. In addition, we find evidence that services grease the wheels of international commerce: A greater availability of services across regions, industries and time increases a firm's foreign sourcing of materials relative to sales. Interestingly, this positive impact of local service availability on imports especially applies to stand-alone firms that, unlike multinationals, are less likely to rely on imported or internally provided services.en_US
dc.publisher|aCentre for Economic Policy Research |cLondonen_US
dc.relation.ispartofseries|aCEPR Discussion Paper Series, Centre for Economic Policy Research (CEPR), London |x7675en_US
dc.subject.keywordfirm heterogeneityen_US
dc.subject.keywordinternational tradeen_US
dc.subject.keywordsupply chain managementen_US
dc.titleCreasing the wheels of international commerce: How services facilitate firms' international sourcingen_US
dc.typeWorking Paperen_US

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