@TechReport{iza:izadps:dp4729,
            	author={Debaere, Peter and Görg, Holger and Raff, Horst},
            	title={Greasing the Wheels of International Commerce: How Services Facilitate Firms' International Sourcing},
            	year={2010},
	month={Jan},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={4729},
            	url={https://www.iza.org/index.php/publications/dp4729},
	abstract={We use unique plant-level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad. To guide our empirical analysis we develop a monopolistic-competition model of the materials sourcing decisions of heterogeneous firms. The model generates predictions about how the intensity of international sourcing of materials depends on a firm’s productivity and the availability of local services. These predictions are supported by the data. We find evidence that more productive manufacturing firms tend to have a higher ratio of imported materials to sales. In addition, we find evidence that services grease the wheels of international commerce: A greater availability of services across regions, industries and time increases a firm’s foreign sourcing of materials relative to sales. Interestingly, this positive impact of local service availability on imports especially applies to stand-alone firms that, unlike multinationals, are less likely to rely on imported or internally provided services.},
	keywords={supply chain management;firm heterogeneity;international trade;off-shoring;services},
            }