Economics Research Seminar
Adam Szeidl (CEU)
![Adam Szeidl](/fileadmin/_processed_/4/a/csm_Adam_Szeidl_EEA_066d67af1f.jpg)
Firm-to-firm referrals
Abstract: We make randomized firm-to-firm referrals between 700 supplier and client firms in the industry producing the Chinese writing brush. Subsidized referrals lead to subsequent transactions and a partial crowding out of prior partners; information-only referrals have no effect. The referrals increase revenue, profit, and hours worked in supplier firms and growth-oriented client firms. Treated suppliers increase product quality, while treated clients expand product variety into higher-quality products, suggesting that the referrals enable complementary upgrading. Treated firms increase beliefs about the value of partners, search for partners, and the number of non-referred partners, suggesting that pessimistic beliefs is a key partnering friction. The referrals generate very large private and social returns.
Event
K127A
Institut für Volkswirtschaftslehre