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Prehn, Sören
Brümmer, Bernhard
Year of Publication: 
Series/Report no.: 
Diskussionsbeitrag 1109
With the extension of the standard Melitz Model from Ahn et al. [2011], the important role of intermediaries in facilitating trade is now recognized. In this paper, we are going to expand Chaney's [2008] approach to an Intermediate Melitz Model. By researching if Chaney's results still apply for an Intermediate Melitz Model, main results of Chaney are confirmed for the direct export model, but this is not so for the indirect export mode. Here, the elasticity of substitution still dampens the extensive margins; however, whether the dampening effect on the extensive margin still dominates the magnifying effect on the intensive margin is ambiguous. Also, the elasticities of trade ows are no longer larger, but rather smaller than in the Krugman Model. All results are economically meaningful.
international trade
Intermediate Melitz Model
firm heterogeneity
elasticities of trade flows
extensive and intensive margins
Document Type: 
Working Paper
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