Essays in applied microeconomics

Kawakubo, Takafumi (2023) Essays in applied microeconomics. PhD thesis, London School of Economics and Political Science.

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Abstract

This thesis consists of three chapters on trade and organizational economics. The first chapter examines the impact of the 2011 Great East Japan Earthquake on firm performance and supplier relationships. Using Japanese buyer-supplier linkage data and a difference-in-differences empirical strategy, this chapter focuses on buyer firms outside the disaster area and compares those with and without suppliers in the disaster area. On average, treated firms were not differentially hurt by the earthquake. Nonetheless, buyers in long-term relationships with suppliers in the disaster area suffered significant sales losses and struggled to replace their old suppliers. Moreover, the results show that treated firms disproportionately accumulated new suppliers closer to their headquarters. Using seismological data, it is shown that this nearshoring was not due to information update on earthquake risk and suggested it could be due to firms prioritizing supply chain resiliency. The second chapter investigates supply chain dynamics, exploiting panel data on buyer-supplier linkages in Japan. First, we provide evidence of substantial supply chain churning over time, even after excluding firm exits from the market. Second, we find that productivity positive assortative matching between firms exists: Firms are more likely to keep trading with more productive firms and instead stop trading with less productive ones. Lastly, we build a theoretical framework to rationalize these findings. Both supplier and customer firms are heterogeneous and choose their trading partners with a many-to-many matching framework. We derive the implications for supply chain formation and restructuring in response to productivity shocks. The third chapter studies management practices and forecasting ability among UK firms. We link a new UK management survey covering 8,000 firms to panel data on productivity in manufacturing and services. We find that better managed firms make more accurate micro and macro forecasts, even after controlling for their size, age, industry and many other factors. We also show better managed firms appear aware that their forecasts are more accurate, with lower subjective uncertainty around central values. These stylized facts suggest that one reason for the superior performance of better managed firms is that they knowingly make more accurate forecasts, enabling them to make superior operational and strategic choices.

Item Type:	Thesis (PhD)
Additional Information:	© 2023 Takafumi Kawakubo
Library of Congress subject classification:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce
Sets:	Departments > Economics
Supervisor:	Van Reenen, John and Burgess, Robin and Bandiera, Oriana and Manelici, Isabela
URI:	http://etheses.lse.ac.uk/id/eprint/4697

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