Relationship stickiness, international trade, and economic uncertainty

Julien Martin, Isabelle Mejean and Mathieu Parenti ()

No 15609, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study how stickiness in business relationships influences the trade impact of aggregate uncertainty. We first develop a product-level index of relationship stickiness estimated from firm-to-firm trade data. The measure is grounded into a search model in which more stickiness implies longer firm-to-firm trade relationships, conditional on match quality. We then show that relationship stickiness shapes the dynamics of trade in response to uncertainty shocks. Episodes of high macroeconomic uncertainty are associated with less trade, mostly driven by a decrease in the net creation of firm-to-firm relationships. Such adjustments are significantly more pronounced among the most sticky product categories.

Keywords: Firm-to-firm trade; Relationship specificity; Uncertainty (search for similar items in EconPapers)
JEL-codes: D22 F14 F44 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-int and nep-opm
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Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Relationship stickiness, international trade, and economic uncertainty (2024)
Working Paper: Relationship stickiness, international trade, and economic uncertainty (2024)
Working Paper: Relationship Stickiness, International Trade, and Economic Uncertainty (2023)
Working Paper: Relationship Stickiness, International Trade, and Economic Uncertainty (2023)
Working Paper: Relationship Stickiness, International Trade, and Economic Uncertainty (2023)
Working Paper: Relationship Stickiness, International Trade, and Economic Uncertainty (2021)
Working Paper: Relationship Stickiness, International Trade, and Economic Uncertainty (2021)
Working Paper: Relationship Stickiness, International Trade, and Economic Uncertainty (2021)
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