TY  - BOOK
AU  -  Javorcik, Beata
AU  -  Michalski, Tomasz K.
AU  -  Ors, Evren
AU  - 2024
AU  - Demir, Banu
TI  - Financial Constraints and Propagation of Shocks in Production Networks
SN  - 0034-6535
PB  - The Review of Economics and Statistics
KW  -  Import-Tax
KW  -  Low-Liquidity
KW  -  Nontrivial Economic Impact
KW  -  Production Networks
KW  - Financial Constraints
N2  - 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
UR  - https://doi.org/10.1162/rest_a_01162
ER  -