In certain industries, sales agent contracts include provisions for sales commissions and clawbacks of commissions if clients are not retained. We show that contracts with these features arise in environments having up‐front selling costs recouped from ongoing sales; heterogeneous customers; limited agent access to capital markets; and imperfect commitment to long‐term contracts. We test the model using information on insurance sales agent contracts from New Zealand prior to and after bank entry into insurance sales. The evidence indicates that banks cream‐skimmed customers. We predict that this should reduce the values of sales commissions and clawbacks. The data support this prediction.

We show that the Armenter and Koren model's firm-product-country results rely on the assumption that export shipment size is independent of firm size, and this assumption is contradicted by the data. When actual shipment sizes are used in the balls-and-bins model, it cannot reproduce the data on single product/single country exporters. Beyond just showing that the shipment size assumption matters to balls-and-bins outcomes, our results highlight the important fact that shipment size is an economic decision, co-determined with other export choices. For this reason, we argue that a balls-and-bins model cannot be a purely statistical benchmark model.