Share

Endogenous Production Networks with Fixed Costs

2023
Download Endogenous Production Networks with Fixed Costs PDF Online Free

Author :
Release : 2023
Genre :
Kind : eBook
Book Rating : /5 ( reviews)

GET EBOOK


Book Synopsis Endogenous Production Networks with Fixed Costs by : Emmanuel Dhyne

Download or read book Endogenous Production Networks with Fixed Costs written by Emmanuel Dhyne. This book was released on 2023. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a tractable model of endogenous production networks with fixed costs associated with the formation of links between firms. The model consists of a finite number of firm types producing differentiated products. Each firm is characterized by firm-specific parameters describing its CES production function, firm-specific domestic and foreign demand shifters, and a firm-specific set of potential suppliers and buyers. We consider versions of the model in which either the buyer or the supplier initiates the formation of links, and versions in which the production network can be cyclic or acyclic. Our main theoretical result is that the closed economy equilibrium is unique if the set of feasible networks consists only of networks that are acyclic and the buyer initiates the link formation while having full bargaining power in price negotiations with the supplier. We provide examples of multiple equilibria if the supplier initiates the link formation in both cyclic and acyclic feasible networks or if the buyer initiates the link formation in a cyclic production network. We take the acyclic production network model to Belgian data on firm-to-firm production networks and show that it approximates well the salient features of the network. The endogenous network model generates substantial churn in domestic firm-to-firm linkages in response to trade shocks. However, the endogenous network model generates only moderately different welfare changes compared to a model with fixed linkages, suggesting that exogenous production networks can approximate the welfare response to trade shocks reasonably well.

Endogenous Production Networks and Supply Chain Disruptions

2022
Download Endogenous Production Networks and Supply Chain Disruptions PDF Online Free

Author :
Release : 2022
Genre :
Kind : eBook
Book Rating : /5 ( reviews)

GET EBOOK


Book Synopsis Endogenous Production Networks and Supply Chain Disruptions by : Nuriye Melisa Bilgin

Download or read book Endogenous Production Networks and Supply Chain Disruptions written by Nuriye Melisa Bilgin. This book was released on 2022. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the role of production networks and provides a causal estimate of how supply chains affect prices and productivity. Leveraging unique firm-level production network data from Turkey, a country with high inflation and expansionary monetary policy, I isolate the supply shock by exploiting the disruption from Chinese suppliers due to the lockdown. I document that firms relying on imports from China raise their prices by 11 % and experience a 24 % decrease in productivity following the supply chain disruption. To explore the mechanism, I further extend the analysis at the firm-product level and uncover that the effect on labor productivity is primarily driven by the intermediate and capital goods. Guided by the empirical findings, I propose a theoretical framework where firms are heterogeneous regarding their core and network productivities. The firm's supplier matches shape these network productivities as firms select into productive or low-cost suppliers to maximize their profits. I show that the endogeneity of the production network also originates from interdependent choices. In this way, this paper offers a new layer of firm heterogeneity as supply chain choices. Finally, I calibrate the model to analyze the implications of expanding the firm's supply chain. Counterfactual supply chains, with lower fixed costs associated with Chinese suppliers, translate into a decrease of 1.2 % in aggregate prices.

Endogenous Spatial Production Networks: Theory, Estimation, and Evidence from Indian Firm-to-Firm Linkages

2021
Download Endogenous Spatial Production Networks: Theory, Estimation, and Evidence from Indian Firm-to-Firm Linkages PDF Online Free

Author :
Release : 2021
Genre :
Kind : eBook
Book Rating : /5 ( reviews)

GET EBOOK


Book Synopsis Endogenous Spatial Production Networks: Theory, Estimation, and Evidence from Indian Firm-to-Firm Linkages by : Piyush Paritosh Panigrahi

Download or read book Endogenous Spatial Production Networks: Theory, Estimation, and Evidence from Indian Firm-to-Firm Linkages written by Piyush Paritosh Panigrahi. This book was released on 2021. Available in PDF, EPUB and Kindle. Book excerpt: In modern economies, production is organized in large-scale complex networks of firms trading intermediate inputs with each other. Larger Indian firms selling inputs to other firms tend to have more customers, tend to be used more intensively by their customers, and tend to have larger customers. Motivated by these regularities, I propose a novel empirical model of trade featuring endogenous formation of input-output linkages between spatially distant firms. The empirical model consists of (a) a theoretical framework that accommodates first order features of firm-to-firm network data, (b) a maximum likelihood framework for structural estimation that is uninhibited by the scale of data, and (c) a procedure for counterfactual analysis that speaks to the effects of micro- and macro- shocks to the spatial network economy. In the model, differences in production costs across firms arise not just from differences in productivity but also from finding the most cost-effective suppliers of intermediate inputs. Firms with low production costs end up larger because they find more customers, are used more intensively by their customers and in turn their customers lower production costs and end up larger themselves. The model is estimated using novel micro-data on firm-to-firm sales between Indian firms. The model's fit is good. The estimated model implies that a 10% decline in inter-state border frictions in India leads to welfare gains ranging between 1% and 8% across districts. Moreover, over half of the variation in changes in firms' sales to other firms can be explained by endogenous changes in the network structure.

Modularity and the Organization of International Production

2003
Download Modularity and the Organization of International Production PDF Online Free

Author :
Release : 2003
Genre :
Kind : eBook
Book Rating : /5 ( reviews)

GET EBOOK


Book Synopsis Modularity and the Organization of International Production by : Ari van Assche

Download or read book Modularity and the Organization of International Production written by Ari van Assche. This book was released on 2003. Available in PDF, EPUB and Kindle. Book excerpt:

Spatial Production Networks

2023
Download Spatial Production Networks PDF Online Free

Author :
Release : 2023
Genre :
Kind : eBook
Book Rating : /5 ( reviews)

GET EBOOK


Book Synopsis Spatial Production Networks by : Costas Arkolakis

Download or read book Spatial Production Networks written by Costas Arkolakis. This book was released on 2023. Available in PDF, EPUB and Kindle. Book excerpt: We use new theory and data to study how firms endogenously form production networks across regions and countries. Supplier and buyer relationships form depending on firms' productivity and geographic location. We characterize the normative and positive properties of the spatial distribution of economic activity and welfare in general equilibrium. We calibrate the model using domestic and international firm-to-firm trade data from Chile. Both iceberg trade costs and search and matching frictions are important for aggregate trade flows and production networks. Endogenous formation of production networks leads to larger and more dispersed effects of international and intra-national trade cost shocks.

You may also like...