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The supplier network of exporters : Connecting the dots

Author

Listed:
  • Emmanuel Dhyne

    (Research Department, NBB and UMons)

  • Stela Rubínová

    (The Graduate Institute, Geneva)

Abstract
The capability of domestic firms to compete on foreign markets is an important indicator of a country’s economic strength and a target of many economic policies. We know that only a small share of producers sells on foreign markets and that these firms perform in many aspects differently from their purely domestic counterparts. Recent research, however, highlighted that many exporters are just trade intermediaries that do not produce the exported good and, importantly, the capability to export is supported by availability of cheap and high-quality inputs. This suggests that in order to understand an economy’s involvement in international trade and the characteristics of firms that produce for foreign markets we need to look beyond the firms that own a good when it crosses the border and acknowledge that many firms are engaged in international trade indirectly. This paper fills the gap by offering the first glimpse of the domestic supplier network that underpins exports production. To this purpose we use a new and unique dataset of yearly transactions between all domestic firms in the Belgian economy and augment it with data on firms’ characteristics and their international transactions. We show that the current picture of firms in international trade indeed misses an important share of firms. While we confirm that direct exporters are the best performing firms, we also show that they are supported by suppliers that are very good performers themselves. In fact, we find evidence of a performance premium that is increasing in the proximity to foreign demand.

Suggested Citation

  • Emmanuel Dhyne & Stela Rubínová, 2016. "The supplier network of exporters : Connecting the dots," Working Paper Research 296, National Bank of Belgium.
    • Handle: RePEc:nbb:reswpp:201605-296
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    File URL: https://www.nbb.be/doc/ts/publications/wp/wp296en.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Emanuele Brancati & Carlo Pietrobelli & Caio Torres Mazzi, 2024. "The Influence of value chain governance on innovation performance: A study of Italian suppliers," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 14(2), pages 319-344, June.
    2. Colovic, Ana & Misganaw, Bisrat A. & Assefa, Dawit Z., 2022. "Liability of informality and firm participation in global value chains," Journal of World Business, Elsevier, vol. 57(1).
    3. E. Dhyne & C. Duprez, 2017. "The world is a village… The integration of Belgian firms into the world economy," Economic Review, National Bank of Belgium, issue ii, pages 25-36, september.
    4. Emmanuel Dhyne & Cedric Duprez, 2017. "It’s a Small, Small World... A Guided Tour of the Belgian Production Network," International Productivity Monitor, Centre for the Study of Living Standards, vol. 32, pages 84-96, Spring.
    5. Cosimo Beverelli & Victor Stolzenburg & Robert B. Koopman & Simon Neumueller, 2019. "Domestic value chains as stepping stones to global value chain integration," The World Economy, Wiley Blackwell, vol. 42(5), pages 1467-1494, May.
    6. Andrzej Cieslik & Jan Jakub Michalek & Krzysztof Szczygielski, 2019. "What matters for firms’ participation in Global Value Chains in Central and East European countries?," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 14(3), pages 481-502, September.
    7. Daunfeldt, Sven-Olov & Engberg, Erik & Halvarsson, Daniel & Kokko, Ari & Tingvall, Patrik, 2019. "Wholesale firms: A catalyst for Swedish exports?," Ratio Working Papers 328, The Ratio Institute.

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    More about this item

    Keywords

    Exporters; domestic suppliers; productivity;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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