Technical Appendix for The Role of Intermediaries in Facilitating Trade

This paper documents that intermediaries play an important role in facilitating international trade. We modify a heterogeneous \u85rm model to allow for an intermediary sector. The model predicts that \u85rms will endogenously select their mode of exporteither directly or indirectly through an intermediarybased on productivity. The model also predicts that intermediaries will be relatively more important in markets that are more di ¢ cult to penetrate. We provide empirical con\u85rmation for these predictions using the \u85rm-level census of Chinas trade, and generate new facts regarding the activity of intermediaries. We also provide evidence that \u85rms begin to export directly after exporting through intermediaries