Nobody’s gonna slow me down? The effects of a transportation cost shock on firm performance and behavior

The authors study the firm-level responses to a substantial increase in transportation costs in the wake of a quasi-experiment that introduced tolls in a subset of Portuguese highways. Exploiting a unique dataset encompassing the universe of Portuguese private firms, the authors find that the introduction of tolls caused a substantial decrease in turnover (−10.2%) and productivity (−4.3%) in treated firms vis-à-vis firms in the comparison group. In response to the tolls, firms substantially cut employment-related expenses and purchases of other inputs. Labor costs were reduced by both employment cuts and a decrease in average wages. While firms did not increase inventory, there is some evidence for increased firm exit, in particular by firms in tradables sectors.

Language

  • English

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Filing Info

  • Accession Number: 01885075
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jun 18 2023 6:12PM