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journal article Middlemen Margins and GlobalizationAmerican Economic Journal: Microeconomics Vol. 5, No. 4 (November 2013) , pp. 81-119 (39 pages) Published By: American Economic Association https://www.jstor.org/stable/43189642 Read and download Log in through your school or library Alternate access options For independent researchers Subscribe to JPASS Unlimited reading + 10 downloads Purchase article $10.00 - Download now and later Abstract We study a competitive theory of middlemen with brand-name reputations necessary to overcome product quality moral hazard problems. Agents with heterogeneous abilities sort into different sectors and occupations. Middleman margins do not equalize across sectors if production of different goods are differentially prone to moral hazard, generating endogenous mobility barriers. We embed the model in a setting of North-South trade, and explore the distributive implications of trade liberalization. With large intersectoral moral hazard differences, results similar to those of Ricardo-Viner specific-factor models obtain, whereby southern inequality increases. Otherwise, opposite (i.e., Stolper-Samuelson) results obtain. Journal Information American Economic Journal: Microeconomics publishes papers focusing on microeconomic theory, industrial organization and the microeconomic aspects of international trade, political economy, and finance. The journal publishes theoretical work as well as both empirical and experimental work with a theoretical framework. Publisher Information Once composed primarily of college and university professors in economics, the American Economic Association (AEA) now attracts 20,000+ members from academe, business, government, and consulting groups within diverse disciplines from multi-cultural backgrounds. All are professionals or graduate-level students dedicated to economics research and teaching. Rights & Usage This item is part of a JSTOR Collection. 1. Domestic agent usually takes possession of the goods, while foreign agents do not 2. Domestic agent has authority to set prices, foreign agent does not 3. Domestic agent does some promotion and selling 4. Domestic agent
occasionally extends credits The functions of the domestic and foreign middlemen are quite similar in many areas, but there are certain differences. First, the domestic agent usually takes possession of the goods, whereas the foreign agent does not. In the area of setting prices, the domestic agent has the authority to do so, while his foreign counterpart does not. Both types of domestic middlemen arrange for the shipping of goods, but the foreign middlemen do not. Two other
differences exist between foreign and domestic agents. The domestic agent does some promotion and selling, and occasionally extends credit. On the other hand, foreign agents usually do not participate in these activities. Advantages for companies: Disadvantage: Home-Country Middlemen Advantages Trading companies: U.S. export trading companies Complementary marketers (piggybacking): Manufacturer's
export agent (MEA): What is foreign country middlemen?Foreign middlemen may be agents or merchants, they may be associated with the parent company to varying degrees, or they may be hired temporarily for special purposes. Some of the more important foreign country middlemen are manufacturer's representatives and foreign distributors. Manufacturer s' representatives.
What is home country middlemen?Home country middlemen or domestic middlemen located in the producing firm's country provide marketing services from a domestic base. By selecting domestic middlemen as intermediaries in the distribution processes, companies relegate foreign market distribution to others.
What is the difference between home country middlemen and foreign country middlemen ?)?Both types of domestic middlemen arrange for the shipping of goods, but the foreign middlemen do not. Two other differences exist between foreign and domestic agents. The domestic agent does some promotion and selling, and occasionally extends credit.
What are the 4 types of middlemen in selling your product?These intermediaries, such as middlemen (wholesalers, retailers, agents, and brokers), distributors, or financial intermediaries, typically enter into longer-term commitments with the producer and make up what is known as the marketing channel, or the channel of distribution.
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