Conflict and Supply Chain Network: Evidence from the Donbas War in Ukraine (joint with Alexey Makarin)
Abstract:
How do severe shocks, such as an armed conflict, al ter a country's economy? We study how the production network of a low-incom e country is affected by a devastating but localized conflict. We use the U krainian railway shipment data for 2013--2016 complemented by the administr ative data on firms to document the propagation of a conflict shock through out the supply-chain network. We document substantial spillover effects of conflict on interfirm trade outside of the conflict areas. Our estimates su ggest that the second-order effects of conflict are about a third of the fi rst-order effects. A naive difference-in-differences regression would have underestimated the total impact of conflict on the interfirm economic excha nge by 72%. Finally, we study the consequences of a change in the network s tructure. Firms that, for exogenous reasons, became more central in the pro duction network after the start of the conflict, received a boost to their revenue and profits.
DTSTAMP:20260404T062350Z DTSTART:20200226T130000Z DTEND:20200226T140000Z SEQUENCE:0 TRANSP:OPAQUE END:VEVENT END:VCALENDAR