TY - JOUR
T1 - Production networks, geography, and firm performance
AU - Bernard, Andrew B.
AU - Moxnes, Andreas
AU - Saito, Yukiko U.
N1 - Funding Information:
Workshop in International Trade, Dartmouth Interdisciplinary Network Research Group, Nordic International Trade Seminars, National Bureau of Economic Research International Trade and Investment, Research Institute of Economy, Trade, and Industry, World Bank, and Empirical Investigations in Trade and Investment—Phuket for helpful comments and Yuta Suzuki for great support as a research assistant. We gratefully acknowledge the financial support from the Japan Society for the Promotion of Science (no. 25780181). We thank the Center for Spatial Information Science, University of Tokyo, for its address matching service. This study is conducted as a part of the project “Inter-organizational and Inter-inventors Geographical Proximity and Networks” undertaken at the Research Institute of Economy, Trade, and Industry. This project has received funding from the European Research Council under the European Union’s Horizon 2020 research and innovation program (grant agreement 715147). Matlab and Stata codes and documentation are provided as supplementary material online.
Funding Information:
Thanks go to Adam Kleinbaum, Yaniv Dover, Jonathan Dingel, and Masahisa Fujita as well as seminar participants at Centre for Economic Policy Research European Research Workshop in International Trade, Dartmouth Interdisciplinary Network Research Group, Nordic International Trade Seminars, National Bureau of Economic Research International Trade and Investment, Research Institute of Economy, Trade, and Industry, World Bank, and Empirical Investigations in Trade and Investment—Phuket for helpful comments and Yuta Suzuki for great support as a research assistant. We gratefully acknowledge the financial support from the Japan Society for the Promotion of Science (no. 25780181). We thank the Center for Spatial Information Science, University of Tokyo, for its address matching service. This study is conducted as a part of the project “Inter-organizational and Inter-inventors Geographical Proximity and Networks” undertaken at the Research Institute of Economy, Trade, and Industry. This project has received funding from the European Research Council under the European Union’s Horizon 2020 research and innovation program (grant agreement 715147). Matlab and Stata codes and documentation are provided as supplementary material online.
Publisher Copyright:
© 2019 by The University of Chicago. All rights reserved.
PY - 2019/4/1
Y1 - 2019/4/1
N2 - This paper examines the importance of buyer-supplier relationships for firm performance. We develop a model in which firms outsource tasks and search for suppliers. Lower search and outsourcing costs lead firms to search more and find better suppliers, which in turn drives down marginal costs. We test the theory by exploiting the opening of a high-speed train line in Japan, which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive data set on firms’ buyer-seller linkages, we find significant improvements in firm performance as well as creation of buyer-seller links, consistent with the model.
AB - This paper examines the importance of buyer-supplier relationships for firm performance. We develop a model in which firms outsource tasks and search for suppliers. Lower search and outsourcing costs lead firms to search more and find better suppliers, which in turn drives down marginal costs. We test the theory by exploiting the opening of a high-speed train line in Japan, which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive data set on firms’ buyer-seller linkages, we find significant improvements in firm performance as well as creation of buyer-seller links, consistent with the model.
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UR - http://www.scopus.com/inward/citedby.url?scp=85051127133&partnerID=8YFLogxK
U2 - 10.3386/w21082
DO - 10.3386/w21082
M3 - Article
AN - SCOPUS:85051127133
SN - 0022-3808
VL - 127
SP - 639
EP - 688
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 2
ER -