Year: 2022
Type: report
Abstract: Firm-to-firm connections in domestic and international production networks play a fundamental role in economic outcomes.Firm heterogeneity and the sparse nature of firm-to-firm connections implicitly discipline network structure.We find that a large group of well-established statistical relationships are not useful in improving our understanding of production networks.We propose an ``elementary" model for production networks based on random matching and firm heterogeneity and characterize the families of statistics and data generating processes that may raise underidentification concerns in more complex models.The elementary model is a useful benchmark in developing ``instructive" statistics and informing model construction and selection.
DOI: 10.3386/w30496
Authors: Andrew Bernard, Yuan Zi
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4297103720