Final up to date: December 2021

Utilizing extremely disaggregated transaction-level commerce knowledge, we doc the significance of recent firm-level commerce associate relationships and the addition of recent merchandise to current relationships in driving combination commerce flows. Furthermore, we discover that these margins are delicate to actions within the alternate charge and that this relationship is stronger for bigger corporations. These findings are then rationalized in a mannequin of worldwide commerce with endogenous matching between heterogeneous importers and exporters. Simulations of the mannequin spotlight: (1) a brand new channel by which alternate charges  affect short-run commerce flows; and (2) the significance of agency heterogeneity—on either side of commerce transactions—within the adjustment course of.