Search Results
Working Paper
Weathering the Storm: Supply Chains and Climate Risk
We characterize how firms structure supply chains under climate risk. Using new data on the universe of firm-to-firm transactions from an Indian state, we show that firms diversify sourcing locations, and suppliers exposed to climate risk charge lower prices. Our event-study analysis finds that firms with suppliers in flood-affected districts experience a decline in inputs lasting two months, followed by a return to original suppliers. We develop a general equilibrium model of firm input sourcing under climate risk. Firms diversify identical inputs from suppliers across space, trading off the ...
Briefing
Can Trade Help Mitigate Risk From Weather Disruptions?
As weather-related disruptions become more frequent, firms face increasing risks to their supply chains. To safeguard against these shocks, businesses are adopting strategies to enhance resiliency and ensure that disruptions to key suppliers don't halt operations. In the 2024 working paper by several authors of this article (Juanma, Gaurav, Nicolas and Nitya), we explore how Indian firms mitigate risks from weather events by diversifying their input sources across multiple regions.Using detailed transaction data from Indian firms, we highlight multisourcing as a crucial risk-management ...