Financial Constraints and Propagation of Shocks in Production Networks

By:

Material type: Text

TextPublication details: The Review of Economics and Statistics; 2024Description: 437-454ISSN:

0034-6535

Subject(s):

Online resources:

Click here to access online

Summary: We examine the propagation of a small unexpected supply shock through a production network and the role financial constraints play in its transmission. Using data on almost all Turkish supplier-customer links, we exploit the heterogeneous impact of an unexpected import-tax increase for identification. We find that this relatively minor shock had a nontrivial economic impact on exposed firms and propagated downstream through affected suppliers. Importantly, we show that low-liquidity firms amplified its transmission.

Tags from this library: No tags from this library for this title. Log in to add tags.

Average rating: 0.0 (0 votes)

Holdings
Item type	Current library	Call number	Vol info	Status	Date due	Barcode
Article Index	Dr VKRV Rao Library		Vol. 106, No. 2	Not for loan		AI363

We examine the propagation of a small unexpected supply shock through a production network and the role financial constraints play in its transmission. Using data on almost all Turkish supplier-customer links, we exploit the heterogeneous impact of an unexpected import-tax increase for identification. We find that this relatively minor shock had a nontrivial economic impact on exposed firms and propagated downstream through affected suppliers. Importantly, we show that low-liquidity firms amplified its transmission.

There are no comments on this title.

to post a comment.