Granular Linkages, Supplier Cost Shocks & Export Performance
No 153, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)
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
New Economics Papers: this item is included in nep-bec and nep-int
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Working Paper: Granular Linkages, Supplier Cost Shocks & Export Performance (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:153
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