Javorcik, Beata Michalski, Tomasz K. Ors, Evren 2024 Demir, Banu <br/><br/>
Financial Constraints and Propagation of Shocks in Production Networks 

 -  The Review of Economics and Statistics  2024 
 - 437-454 
<br/><br/> 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. 
<br/><br/><label>ISSN: </label>0034-6535 
<br/><br/><label>Subjects--Topical Terms: </label><br/> Import-Tax<br/> Low-Liquidity<br/> Nontrivial Economic Impact<br/> Production Networks<br/>Financial Constraints