Nuriye Melisa Bilgin (2:00 pm – 3:00 pm)
Endogenous Production Networks and Supply Chain Disruptions
This paper studies the role of production networks and provides a causal estimate of how a supply shock affects prices and productivity. Leveraging unique firm-level production network data from Turkey, a country with high inflation and expansionary monetary policy, I isolate a supply shock by exploiting the disruption from Chinese suppliers due to the lockdown in China. I document that firms relying on imports from China raised their prices by 11% and experienced a 24% decrease in labor productivity following the supply chain disruption. To explore the underlying mechanism, I further extend the analysis at the firm-product level and uncover that the effect on labor productivity is driven primarily by the imports of intermediate and capital goods. Guided by these empirical findings, I build a model of endogenous network formation wherein firms are heterogeneous regarding their efficiency and the efficiency of their suppliers. The firm's supplier matches shape these network productivities as firms select into productive or low-cost suppliers. I show that the endogeneity of the production network also originates from interdependent choices. In this way, this paper offers a new layer of firm heterogeneity as supply chain choices. Finally, I calibrate the model to analyze the implications of expanding the firm's supply chain. Counterfactual supply chains, with lower fixed costs associated with Chinese suppliers, translate into a decrease of 1.2% in aggregate prices.
Nino Abashidze (3:00 pm – 4:00 pm)
Seasonal Airborne Exposures Shape Birth Outcomes Near Hog Farms
Healthy pregnancies support livelihoods by avoiding early life medical costs, increasing aptitude, and reducing propensity to develop certain diseases and ailments later in life. Environmental exposures that disrupt in utero development impose tremendous hardship on affected families and broader society. Yet, these private and social costs remain poorly understood because the pathways of environmental exposures are often elusive and difficult to quantify in a causal way. We estimate the causal effects of hog farm facilities on birth outcomes in surrounding communities using rich, spatially explicit, individual-level data that links infant births to detailed geographic information on hog farm operations. We apply variation in daily wind direction relative to prevailing winds, throughout each woman’s pregnancy, to identify the effects of hog farm exposures on birth outcomes. Evidence suggests that in-utero exposures from hog farm facilities reduce birth weight, shorten gestation periods and increase the likelihood of preterm birth. These airborne exposures are concentrated within three miles of these facilities and driven by the season with greatest sprayfield activity. Taken together, these findings shape a landscape of birth outcomes that reveal “hotspots” of vulnerable populations where the social costs of environmental exposures are highest.
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