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on International Activities of Firms |
| By: | Rocco Macchiavello (LSE); Josepa Miquel Florensa (Toulouse School of Economics.); Nicolás de Roux (Universidad de los Andes); Eric Verhoogen (Columbia University); Mario Bernasconi (University of Basel); Patrick Farrell (Columbia University) |
| Abstract: | Do the returns to quality upgrading pass through supply chains to primary producers? We explore this question in the context of Colombia’s coffee sector, in which market outcomes depend on interactions between farmers, exporters (which operate mills), and international buyers, and contracts are for the most part not legally enforceable. We formalize the hypothesis that quality upgrading is subject to a key hold-up problem: producing high-quality beans requires long-term investments by farmers, but there is no guarantee that an exporter will pay a quality premium when the beans arrive at its mills. An international buyer with sufficient demand for highquality coffee can solve this problem by imposing a vertical restraint on the exporter, requiring the exporter to pay a quality premium to farmers. Combining internal records from two exporters, comprehensive administrative data, and the staggered rollout of a buyer-driven quality-upgrading program, we find empirical support for the key theoretical predictions, both the lack of pass-through of quality premia under normal circumstances and the possibility of a buyer-driven solution through a vertical restraint. Calibration of the model suggests that one-third to two-thirds of the (substantial) gains from the program accrue to farmers, with the vertical restraint playing a critical role. The results are consistent with the hypotheses that quality upgrading can provide a path to higher incomes for farmers, but also that it is unlikely to be viable under standard market conditions in the sector. |
| Keywords: | Quality Upgrading, Relational Contracts, Vertical Restraints, Buyer-Driven Voluntary Standards |
| JEL: | O12 F61 L23 Q12 Q13 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:022173 |
| By: | Fariha Kamal; Zachary Kroff |
| Abstract: | We document the augmenting role of services exports in U.S. multinationals' goods-export growth during the global financial crisis. Using newly linked data on U.S. firms' foreign sales of goods and services and a triple-difference identification strategy combined with propensity-score matching, we find that compared to multinationals that only export goods (mono-exporters), multinationals that also export services to the same destination (bi-exporters) experienced higher goods-export growth. This result is driven by sales of intellectual property rights related to industrial processes (e.g., patents, trademarks). We also find higher growth in bi-exporters' foreign affiliate services sales and domestic employment in services sectors. These results reveal a pivotal role of services exports in supporting foreign demand for U.S. goods during the crisis. |
| Keywords: | multinationals, financial crisis, services exports, goods exports |
| JEL: | F1 F13 F14 F23 H2 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-04 |
| By: | R. LAFROGNE-JOUSSIER (INSEE) |
| Abstract: | To reduce their exposure to supply-chain risk, firms commonly rely on two strategies: input stockpiling and diversification of supply sources. This paper presents new evidence on how French manufacturing firms used inventories and diversified their country-specific supply risks between 2012 and 2023. The use of these strategies varies widely: large firms are generally more diversified and maintain lower inventories relative to smaller firms. Overall, firms that diversify more tend to stockpile less, even conditional on firm size. Diversification is also linked to lower import volatility. Together, these patterns suggest that inventories act as a buffer when firms are unable to reduce risk through diversification. These insights matter for assessing trade vulnerabilities: products sourced from few countries may appear exposed to risk, yet in practice they are often imported by firms holding large stocks. Accounting for inventories can halve the number of products considered highly vulnerable. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:nse:doctra:2025-22 |