This project is part of the research initiative ‘Structural Transformation and Economic Growth’ (STEG), a programme funded by the Foreign, Commonwealth & Development Office (FCDO)
Access to imported inputs is central to firm productivity and structural transformation in low-income economies, yet firms often rely on domestic intermediaries — particularly wholesalers — to connect to foreign markets. This project studies how a large external trade disruption propagates through domestic production networks when access to international trade is mediated by wholesalers.
We exploit the unanticipated Rwanda–Uganda border closure that began in March 2019 as a plausibly exogenous bilateral trade shock and combine linked administrative customs data with firm-to-firm transaction records to measure firms’ direct and indirect exposure to the shock. Using an event-study design, we estimate how firms adjust along input access, production, and supplier network margins depending on their reliance on wholesalers. We then use these estimates to discipline a quantitative counterfactual that compares adjustment under less constrained versus restricted intermediation.
The project provides new evidence on the role of wholesalers in shaping shock transmission and adjustment in a low-income, landlocked economy, with implications for trade facilitation and distribution-sector policy.