American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Trade Disruptions and Reshoring
American Economic Journal: Applied Economics
vol. 17,
no. 1, January 2025
(pp. 239–70)
Abstract
Firms are increasingly concerned about the resilience of their sales and sourcing decisions. Using administrative data, we show that a temporary disruption in trade due to state border closures in India led to a persistent trade collapse within the country—interstate trade relative to intrastate remains five percent lower even six months after all restrictions were lifted. Reshoring explains this phenomenon as plants more dependent on interstate sales (input-sourcing) shift from inter- to intrastate sales (input-sourcing). State borders rather than distance are salient in explaining the observed substitution. We propose a novel product-level measure that determines the extent of reshoring.Citation
Chakrabarti, Anindya S., Kanika Mahajan, and Shekhar Tomar. 2025. "Trade Disruptions and Reshoring." American Economic Journal: Applied Economics, 17 (1): 239–70. DOI: 10.1257/app.20230270Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- F14 Empirical Studies of Trade
- L14 Transactional Relationships; Contracts and Reputation; Networks
- L23 Organization of Production
- O14 Industrialization; Manufacturing and Service Industries; Choice of Technology
- R12 Size and Spatial Distributions of Regional Economic Activity
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