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Types of International Traders and the Network of Capital Participations
F1 - Trade
F14 - Country and Industry Studies of Trade
L25 - Firm Size and Performance
The landscape of international traders is quite diverse. Firms can operate as exporters and importers, and also along the goods and services dimensions. Some firms strongly engage in several of these international trade flows, some firms only participate in one of them, while for other firms trade flows are just a small share of turnover. In this paper we suggest a taxonomy that classifies international traders in terms of the complexity of their participation in international trade. In addition, we study the linkages between different types of traders and build the network of their capital participations. The paper concludes that more complex international traders tend to be larger, younger, more productive and pay higher wages. However, their profitability is not clearly different from that of other traders. Moreover, evidence on capital linkages between types of traders suggests that minor traders do not compensate their low engagement in foreign markets through strong capital participations with other types of traders. Conversely, complex traders present strong capital linkages, thus adding two layers of complexity. Moreover, for more complex traders, the existence of many external capital participations is associated with labour productivity gains.