Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/128425 
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper No. 5724
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
How valuable are long-term supplier relationships? To address this question, this paper explores relationships between U.S. importers and their suppliers abroad. We first establish several facts: almost half of U.S. imports are in relationships three years or older, relationship survival and traded quantity increase as a relationship ages, and long-term relationships were more resilient in the 2008/9 financial crisis. Based on these findings, we present a model of importer learning and calibrate it using our data. We estimate large differences in the value of relationships across countries. Counterfactuals show that relationships are central to trade flows following external shocks.
Subjects: 
international trade
firm relationships
learning
institutions
JEL: 
F11
F14
L14
D22
Document Type: 
Working Paper
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