Dear All,

The Department of Economics invites you to their weekly seminar on Wednesday, January 22nd, 2025.

Time: 1:40 PM to 2:50 PM

Zoom Link: https://zoom.us/j/97276246135?pwd=J5IBQGovCky8r7LFXcPcHIFHYpRBxM.1

Speaker:  Alejandra Martinez

Title: "Trade Relationships During and After a Crisis:  Evidence from Road Disruptions in Colombian Flower Exports"

Abstract: I study the impact of an extreme weather event on international trade relationships. Exploiting variation in Colombian flower exporters’ access to cargo terminals during an unprecedented La Niña season in 2010-11 when some roads became impassable, I find that exporter-importer relationships exposed to road disruptions became 7 percentage points less likely to end during the road disruptions. These results are driven by importers that can hedge against non-deliveries by relying on current relationships. A firm-level exposure measure shows that relationships linked to importers who cannot rely on other current relationships for sourcing are more likely to end. I present a theoretical framework that rationalises the decision to keep or replace a relationship based on (1) the relative cost of establishing a new trade relationship, and (2) firm profits affected by other exposed relationships. The findings shed light on the dynamics of international buyer-seller relationships in the context of extreme weather events.