Study on the Volume of Indirect Export of Manufactured Products

Author Name URABE Sumiko (Ministry of Economy, Trade and Industry) / SAITO Yukiko (Senior Fellow (Specially Appointed))
Creation Date/NO. January 2019 19-P-002
Research Project Dynamics of Inter-organizational Network and Firm Lifecycle
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The ratio of directly exporting companies among manufacturing companies is very low, as the cost of direct export is too large for SMEs. This fact leads to the necessity of the facilitation of direct export for SMEs. On the other hand, researchers have suggested that "indirect export" through trading companies, could support the access of SMEs to foreign demand.

This paper analyzes the indirect export volume using official statistics of the Japanese government, such as the Census of Manufacturers, Census of Commerce, and Commodity Distribution Survey, in order to examine the extent of indirect exports by SME exports and companies in rural area in general.

The key findings are as follows, 1) while indirect export volume is less than before the global economic crisis, many manufacturing sectors continue to depend on indirect exports, 2) indirect export occupies a large share of exports for manufacturers in many rural areas, 3) sectors with high rates of SME participation tend to have higher ratios of indirect exports.

The above facts suggest that indirect export supports the access of SMEs to foreign demand.