Relationship stickiness, international trade, and economic uncertainty - HAL-SHS - Sciences de l'Homme et de la Société
Preprints, Working Papers, ... Year : 2024

Relationship stickiness, international trade, and economic uncertainty

Abstract

We study how stickiness in business relationships influences the trade impact of aggregate uncertainty. To begin, we construct a product-level index of relationship stickiness using firm-to-firm relationship duration data. We then demonstrate how relationship stickiness shapes trade dynamics in response to uncertainty shocks.

We find that episodes of uncertainty lead to a decline in the overall establishment of new business relationships, with the impact varying depending on the level of stickiness. In markets characterized by high stickiness, uncertainty shocks primarily impede investments in new firm-to-firm relationships. In contrast, for non-sticky products, the adjustment to uncertainty shocks mainly manifests as the disruption of existing relationships.

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Dates and versions

halshs-04721417 , version 1 (04-10-2024)

Identifiers

  • HAL Id : halshs-04721417 , version 1

Cite

Julien Martin, Isabelle Mejean, Mathieu Parenti. Relationship stickiness, international trade, and economic uncertainty. 2024. ⟨halshs-04721417⟩
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