Multinational retailers and firm-level exports
2013
Cheptea, Angela | Emlinger, Charlotte | Latouche, Karine
We explore the link between globalization of the retail sector and the export activity of firms from their origin country. In a previous paper (Cheptea, Emlinger and Latouche, 2012), we show that the overseas expansion of a country’s retailers fosters its exports to these foreign markets. This can be due to a reduction of trade costs for supplying firms of retail companies in the domestic markets, via a network effect, or to a change in consumer preferences in the host country that benefits all origin country firms. We expect export costs to differ for the two types of firms and employ firm-level data to evaluate the relative importance of the two channels. We identify retailers’ suppliers using data on the certification of French agri-food firms with the private IFS standard, granting them the right to sell their products under a retailer’s brand. We find that certified French firms export more than non-certified firms to markets where IFS retailers established outlets (mainly outside Europe). The difference is statistically significant and robust to the use of firm- and country-specific fixed effects or controls. Our finding suggests that suppliers of multinational retailers benefit from a network effect which enables them to export at lower costs and to take advantage of the expansion of the IFS standard.
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