From Beijing to Bentonville: Do Multinational Retailers Link Markets?

Foreign Direct Investment in India’s Retail Bazaar: Opportunities and Challenges

“…Second, Chinese city-level exports to all destinations may have grown if multinational retailer presence enhanced the general export capabilities of local suppliers. Evidence from Chinese city-level retail goods exports supports the capability hypothesis as the expansion of Chinese city exports follows the geographic expansion of the retailers' Chinese stores and global procurement centers (Head, Jing and Swenson, 2010). Wal-Mart has therefore contributed to the trend of increased outsourcing which could bode well for agricultural exports from India.…”

“…A recent study notes that each of the world's largest retailers---Wal-Mart, Carrefour, Tesco, and Metro---entered China after 1995 and that their subsequent expansion in China may have influenced Chinese exports through two channels (Head, Jing and Swenson, 2010). First, the authors argue that large retailers may have enhanced bilateral exports between the retailers' Chinese operations and destination countries also served by stores in the retailers' networks.…”

Private Labels and International Trade: Trading Variety for Volume

“…We are particularly interested in the potential for 'pooled-producer' sourcing by intermediaries -the practice through which a given intermediary sources products from multiple independent producers to subsequently rebrand under a new umbrella label completely divorced from the manufacturer's identity and firm-specific characteristics -what the marketing literature calls 'brand equity'. So-called 'private label' brands sold by major international retailers (for example, Circo (Target), Sam's Choice (Wal-Mart), or Kirkland Signature (Costco)) are one possible manifestation of pooledproducer products, but we suggest the phenomenon is broader than simply house brands sold by 1 See Rauch and Watson (2004), Feenstra and Hanson (2004), Felbermayr and Jung (2008), and Felbermayr and Jung (2009) 2 See Blum, Claro, and Horstmann (2010), Head, Jing, and Swenson (2010), Antràs and Costinot (2011), Ahn, Khandelwal, and Wei (2012), and Akerman (2010).…”

“…We build a tractable heterogeneous firms model of intermediated trade with pooled-producer (private label) contracts. In the existing literature, intermediaries offer simple wholesale arrangements that leave the manufacturer's inherent product characteristics untouched and perfectly observable to the consumer; thus the role of the intermediary is simply to reduce the (average) net cost of reaching consumers either by resolving any informational asymmetry 5 In related work, Head, Jing, and Swenson (2010) test the impact of multinational retailers' local Chinese operations and subsequent export activity from China, while Basker and Van (2010a) and Basker and Van (2010b) consider the impact of Wal-Mart on U.S. imports from China problem or reducing the (fixed) trade costs of direct market access. By contrast, in our model intermediaries pool their upstream suppliers' products, thus stripping manufacturer-specific identifiers from the product before it reaches the consumer.…”

How Do Firms Respond to Political Tensions? The Heterogeneity of the Dalai Lama Effect on Trade

“…Trade intermediaries are found to show different trade behaviors when compared to direct traders (Ahn et al 2011;Antràs and Costinot 2011;Lu et al 2011;Head et al 2014;Bernard et al 2015). Following the logic of Ahn et al (2011), political tensions, such as those caused by Dalai Lama meetings, should show up predominantly as decreases in imports by direct traders as they cannot cope with the additional costs of circumventing the import restrictions imposed by government action.…”