Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/170698
Authors: 
Defever, Fabrice
Fischer, Christian
Suedekum, Jens
Year of Publication: 
2017
Series/Report no.: 
DICE Discussion Paper 273
Abstract: 
In this paper, we consider a dynamic search-and-matching problem of a firm with its intermediate input supplier. In our model, a headquarter currently matched with a supplier, has an interest to find and collaborate with a more efficient partner. However, supplier switching through search and re-matching is costly. Given this trade-off between the fixed costs and the expected gains from continued search, the process will stop whenever the headquarter has found a sufficiently efficient supplier. Using firm-product-level data of fresh Chinese exporters to the United States, we obtain empirical evidence in line with the predictions of our theory. In particular, we find that the share of short-term collaborations is higher in industries with more supplier-cost dispersion, an indication of higher expected search opportunities.
Subjects: 
input sourcing
relational contracts
supplier search
JEL: 
F23
D23
L23
ISBN: 
978-3-86304-272-1
Document Type: 
Working Paper

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