Shock Propagation within Multi-sector Firms

66 Pages Posted: 14 Aug 2021 Last revised: 24 May 2023

See all articles by Jay Hyun

Jay Hyun

HEC Montréal

Ziho Park

National Taiwan University

Vladimir Smirnyagin

Yale University

Date Written: June 30, 2022


This paper studies the role of multi-sector firms in the cross-sectoral propagation of economic shocks. By leveraging an increase in import competition from China as a source of a negative economic shock, we show that employment of an establishment in a given industry is negatively affected by the shock that hits establishments operating in other industries within the same firm. We explore a range of explanations for our findings, emphasizing the role of within-firm input-output linkages and within-firm diversification across sectors. At the sectoral level, the shock that propagates through firms' internal networks has a sizable impact on industry-level employment dynamics.

Keywords: Multisector firms, networks, shock propagation, firm diversification, import competition

JEL Classification: D22, F14, F40, L14, L22

Suggested Citation

Hyun, Jay and Park, Ziho and Smirnyagin, Vladimir, Shock Propagation within Multi-sector Firms (June 30, 2022). Available at SSRN: or

Jay Hyun (Contact Author)

HEC Montréal ( email )

7525 Av. Mountain Sights
App 906
Montréal, Quebec H4P 0A4

HOME PAGE: http://

Ziho Park

National Taiwan University ( email )

1 Sec. 4, Roosevelt Road
Taipei 106, 106
+82 01095092521 (Phone)

Vladimir Smirnyagin

Yale University ( email )

New Haven, CT
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
PlumX Metrics