Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/74936 
Year of Publication: 
2012
Series/Report no.: 
LICOS Discussion Paper No. 312
Publisher: 
Katholieke Universiteit Leuven, LICOS Centre for Institutions and Economic Performance, Leuven
Abstract: 
This paper documents that a large fraction of trade flows at the firm level consists of simultaneous imports and exports in identical products, narrowly defined at the 8-digit product classification, which we call Pass-On Trade, POT. We use data on imports and exports at the firm?product level for Slovenian manufacturing firms in the period 1994-2008, to show that, on average, 70 percent of all exporting firms engage in POT. This corresponds to more than 50 percent of all exported products. Thus, imported products that are exported again by the same firm is a statistical regularity of trade of Slovenian manufacturing firms. We document that the use of POT is increasing in firm size, product diversification, multinational status as well as firm productivity and profitability. We offer and explore empirically a number of explanations for POT. Among possible explanations, we find evidence on the importance of firms' multinational networks and demand complementarities between firms' own and POT products. The latter confirms the theoretical explanations for ?Carry-Along Trade? (CAT) as developed by the recent work of Bernard et al (2010, 2012).
Subjects: 
pass-on trade
multi-product firms
two-way trade
JEL: 
R10
R15
Document Type: 
Working Paper

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