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Granular Linkages, Supplier Cost Shocks & Export Performance

Santiago Camara

No 153, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: This paper presents evidence on the granular nature of firms’ network of foreign suppliers and studies its implications for the impact of supplier shocks on domesticfirms’ performance. To demonstrate this, I use customs level information on transactions between Argentinean firms and foreign firms. I highlight two novel stylized facts:(i) the distribution of domestic firms’ number of foreign suppliers is highly skewed with the median firm reporting linkages with only two, (ii) firms focus imported valueon one top-supplier, even when controlling for firm size. Motivated by these facts I construct a theoretical framework of heterogeneous firms subject to search frictions inthe market for foreign suppliers. Through a calibration exercise I study the framework’s predictions and test them in the data using a shift-share identification strategy.Results present evidence of significant frictions in the market for foreign suppliers and strong import-export complementarities.

Keywords: Export Dynamics; International trade; Search and matching; Heterogeneous firms; Granularity; Firm-to-firm linkages. (search for similar items in EconPapers)
Pages: 66 pages
Date: 2022-06
New Economics Papers: this item is included in nep-bec and nep-int
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