Broken Promises and the Cost of Intranational Trade
Firms rely on other firms to do business— to supply inputs, to buy their products, to ship their goods to where people live. What happens when this reliance breaks down? How much does it cost the firms themselves and the economy as a whole?
We study how contract breaches affect the costs of trade in the Indian trucking industry. Transporters (truckers) sign contracts promising to bring manufacturers’ goods to market. When it is time to deliver the goods, though, transporters may back out if they can get a better rate for their services. This leaves manufacturers in the lurch since they might not be able to get their goods to market in time, reducing sales. When transporters back out of the deal– a contract failure, in the terms of the industry— this has costs for the manufacturer. But it may or may not be bad for the economy, depending on how hard it is for firms to find a new transporter, and how the manufacturer’s costs compare to the value of the alternative use of the truck.
The project relies on a large administrative dataset of shipping contracts, prices and failures from a leading Indian logistics platform. The RA would work with this data to estimate economic models of the determinants of contract failures and their costs. The RA may also contribute to the development of a new measure of the sustainability of transportation or “greenness” of the supply chain. Finally, the RA may also assist in the design and evaluation of a randomized control trial on contract flexibility conducted jointly with the platform operator.
Requisite Skills and Qualifications: The main desired skills are: (i) proficiency in python programming (very strongly preferred, with R as an alternative) (ii) skill and experience working with large datasets (iii) familiarity with predictive models from machine learning (a plus but not required). If you are proficient in python and/or R please submit a coding sample with your application. Multiple RA-ships may be offered.