Firm-to-Firm Access in Production Networks

Speaker：Lin Wei, Assistant Professor, Chinese University of Hong Kong (Shenzhen)

Host：Sha Wenbiao, Assistant Professor, Lingnan College

Time and Date：14:30, June 17, 2026 (Wednesday)

Venue：C.S.LAM Conference Room (103), Lingnan Hall

Language：English + Chinese

Abstract：

To study firm-to-firm access in production networks, we randomized referrals among 700 supplier and client firms in an industry cluster producing the Chinese brush pen. We have two results. (1) A key barrier to access was that firms undervalued potential partners, leading to a low-access development trap. In particular, the referrals not only created lasting partnerships, but also increased beliefs about potential partner quality and search for partners, and led to additional partners beyond those we referred. These effects were only present for referrals where firms were subsidized to make a first transaction, providing an experience to update their valuation. (2) The referrals changed industry equilibrium by expanding—not just reallocating— the production network and economic activity. Treated firms increased their total number of partners, upgraded their products, and improved business performance. Indirect effects were positive, indicating that gains were not offset by crowding out. Taken together, our results suggest that low-access traps can constrain industrial development, and that improving access can unlock large gains by facilitating new activity.

Profile:

Lin Wei is an Assistant Professor of Economics at the Chinese University of Hong Kong, Shenzhen. He received his PhD from UC Berkeley in 2022.​ His research interests include learning and matching frictions in technology adoption, migration market, and firm-to-firm network. He currently serves as associate editor at the Journal of Development Economics.