Title: Roads to Inventory: Market Expansion and Input Sourcing Cost Reduction

Speaker: Assistant Professor Xun Zhang, Beijing Normal University

Time: October 11th, 2017 13:30–15:00

Venue: Conference Room 106, Zhonghui Building (College of Economics, JNU)

Abstract:

This paper comprehensively investigates the effect of infrastructure on both firm’s output and input sides from the perspective of inventory. A theoretical framework is proposed, which highlights that roads reduce transportation cost of final goods, help a firm’s market expansion, and thus increase inventory demand, while roads also reduce input sourcing cost and save inventory under demand uncertainty. A mediating model is then used with firm-level data, the results of which confirm the two transmission channels of roads to inventory.