Buyer–seller relationships in international trade: Do your neighbors matter?

Using confidential U.S. customs data on trade transactions between U.S. importers and Bangladeshi exporters between 2003 and 2009, and information on the geographic location of Bangladeshi exporters, we show that the presence of neighboring exporters that previously transacted with a U.S. importer is associated with a greater likelihood of matching with the same U.S. importer for the first time. This suggests a role for neighbors in generating importer–exporter matches. Our research design permits us to isolate potential gains from neighborhood exporter presence that are partner-specific, from overall gains previously documented in the literature.