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Learning and the Value of Relationships in International Trade

Ryan Monarch and Tim Schmidt-Eisenlohr ()

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: How valuable are long-term supplier relationships? To address this question, this paper explores relationships between U.S. importers and their suppliers abroad. We establish several facts: almost half of U.S. imports involve relationships three years or older, relationship survival and traded quantity increase as a relationship ages, and long-term relationships were more resilient in the 2008-09 financial crisis. We present a model of importer learning and calibrate it using our data. We estimate large differences in the value of relationships across countries. Counterfactuals show that relationships are central to trade dynamics.

Keywords: International Trade; Firm Relationships; Learning; Institutions (search for similar items in EconPapers)
JEL-codes: F11 F14 L14 D22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2016-02
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https://www2.census.gov/ces/wp/2016/CES-WP-16-11.pdf First version, 2016 (application/pdf)

Related works:
Working Paper: Learning and the Value of Relationships in International Trade (2016) Downloads
Working Paper: Learning and the Value of Relationships in International Trade (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:16-11

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