This paper provides casual evidenced that temporary supply disruptions reshape firms’ relationship portfolios in industrial trade. Using exogenous road disruptions during Colombia's 2010-11 La Niña episode, I identify exposure at the buyer-seller relationship level, exploiting variation within importers suppliers portfolios. Exposed relationships are less likely to terminate when importers have alternative non-exposed suppliers. However, firms with broader portfolio exposure gradually reduced their relationship networks and may eventually exit the market. A framework linking relationship surplus to portfolio composition explains these contrasting responses and shows how the same shock generates opposite effects at relationship and firm level.
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Alejandra Martinez
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