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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
What Makes Supply Chains More Resilient to Economic Shocks?
The recent supply chain disruptions caused by COVID-19 lockdowns highlighted the importance of understanding supply chain resilience, which is the extent to which supply chains can resist, adapt to and recover from a sudden economic shock. We analyze the various COVID-19 lockdowns across India to understand which supply chains were more resilient to the lockdown disruptions. Firms that bought more complex products and that transacted with fewer and more important suppliers proved to be more resilient by maintaining buyer-supplier relationships through the lockdowns and exhibiting smaller ...
Briefing
Did U.S. Immigration Policy Influence India’s IT Boom?
We highlight an unintended consequence of U.S. immigration policy for high-skill workers. Indian college students and workers got skills in computer science in the 1990s — a key occupation for innovation and growth — with the prospects of migrating to work in the booming U.S. IT industry. However, many ended up not migrating or returning to India after a short period. These workers helped build the IT sector in India, which grew at outstanding rates in the late 2000s.
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 ...