Review of Economics and Statistics
Managing Export Complexity: The Role of Service Outsourcing
2026-06-18
As manufacturing firms expand globally, business services such as advertising and legal support become essential for entering new markets. Exploiting exogenous demand shocks, we document that French manufacturers increasingly outsource market-access services as they enter more destinations. We develop a theory of market-access costs in which firms weigh the managerial strain of internal provision against adaptation costs of outsourcing—a mechanism that receives empirical sup-port. Further explorations reveal that outsourcing market-access services helps explain variation in access costs related to gravity and extended gravity, affects both sunk and fixed export costs, and substantially amplifies the variety gains from trade liberalization.