View metadata
| dc.title | Network Transmission of Fiscal Demand Shocks in Commodity-Dependent Economies |
| dc.contributor.author | Uribe-Terán, Carlos |
| dc.contributor.author | Zanoni, Wladimir |
| dc.contributor.author | Grijalva, Diego F. |
| dc.contributor.author | Brborich, Sara |
| dc.contributor.author | Manzano, Osmel |
| dc.contributor.orgunit | Country Department Andean Group |
| dc.date.available | 2026-01-28T00:01:00 |
| dc.date.issue | 2026-01-28T00:01:00 |
| dc.description.abstract | We study how procurement-driven fiscal contractions propagate through firm-to-firm pro- duction networks. The 2014 collapse in oil prices triggered a sharp fall in public procure- ment in Ecuador, generating an externally driven fiscal demand shock. Using administra- tive data covering the universe of formal firms from 2012 to 2019, we link balance sheets, transaction-level buyerseller records, and procurement purchases to construct baseline exposure measures that trace the shock from government contractors to their trading part- ners. Direct suppliers to the State experience persistent declines in revenues of 3.58.6%, labor costs of 4.28.6%, and investment of up to 5.7%. Network structure amplifies these ef- fects: contractors embedded in dense procurement clusters suffer additional revenue losses of 2026% and labor cost reductions of 1114%. Spillovers are economically meaningful: firms with no public contracts but selling to state suppliers experience revenue declines of up to 7.3% and labor cost reductions near 6%. Aggregating these causal estimates im- plies a network-adjusted fiscal multiplier of 1.95: a one-dollar reduction in procurement lowers aggregate value added by $1.95, compared with $1.18 when network propagation is ignored. Production linkages therefore account for about 39% of the total output response. |
| dc.format.extent | 37 |
| dc.identifier.doi | http://dx.doi.org/10.18235/0013924 |
| dc.identifier.url | https://publications.iadb.org/publications/english/document/Network-Transmission-of-Fiscal-Demand-Shocks-in-Commodity-Dependent-Economies.pdf |
| dc.language.iso | en |
| dc.publisher | Inter-American Development Bank |
| dc.subject | Small Business |
| dc.subject | Service Provider |
| dc.subject | Public Procurement |
| dc.subject | Fiscal Policy |
| dc.subject | Procurement |
| dc.subject | Investment |
| dc.subject | Labor |
| dc.subject | Public Expenditure |
| dc.subject.jelcode | E62 - Fiscal Policy |
| dc.subject.jelcode | H57 - Procurement |
| dc.subject.jelcode | D22 - Firm Behavior: Empirical Analysis |
| dc.subject.jelcode | L14 - Transactional Relationships • Contracts and Reputation • Networks |
| dc.subject.jelcode | O54 - Latin America • Caribbean |
| dc.type | Working Papers |
| idb.identifier.pubnumber | IDB-WP-01793 |
| idb.operation | RG-P1844 |