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Does "Network Closure" Beef up Import Premium?

Alessio Muscillo, Paolo Pin (), Tiziano Razzolini () and Francesco Serti ()
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Alessio Muscillo: University of Siena
Tiziano Razzolini: University of Siena

No 12036, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We investigate whether network closure in the supply chain can explain the heterogeneity observed in import premia. Using unique panel data on trade flows among beef farms in the Italian region of Piedmont, we analyze a purely sequential supply chain characterized by the co-existence of two competing production systems: domestic cattle, of lower quality and less risky, and imported cattle, of higher quality and exposed to higher risks. Our findings indicate that trust and mutual cooperation, computed in terms of network closure, are associated with increasing gains from imports and may promote the use and investment in inputs of superior quality.

Keywords: import premium; network closure; sequential supply chain (search for similar items in EconPapers)
JEL-codes: D22 D85 F10 F14 L14 O13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-int and nep-soc
Date: 2018-12
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