We estimate an alternative specification that links time-varying firm shocks, GDP growth in the firm’s destinations, to time-varying firm outcomes given by: where _Zjt_ is a vector of firm covariates, _Zs_ 4 _t_ corresponds to 4-digit sector _s_ “pre-trends” (past growth in 4-digit sector outcome), _I_<sup>_st_</sup> and _I_<sup>_rt_</sup> stand for, respectively, 2-digit sector-year and region-year fixed effects, _I_<sup>_j_</sup> stands for firm fixed effects that are included in some of the specifications, and _υjt_ is an error term. This specification is estimated using data for the entire sample period before and after the GFC (2004-2017). Note that the main regressor is minus the time-varying average GDP growth in the firm’s export destinations in the same way that the multiplication by minus 1 is used in Section II for the firm shock fixed at its 2008 value. The specifications control also for time-varying firm shocks based on imports, GDP growth in the firm’s origins.

Table D4: Firm Labor Market Outcomes’ Adjustment to Time-Varying Shock

||Fir<br>si|m<br>ze|To<br>real|tal<br>wage|Fir<br>Ex|m<br>it|Share<br>skilled w|of<br>orkers|
|---|---|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|
|Lagged frm shock GDP growth export dest.|-0.1057***|-0.0203***|-0.1069***|-0.0172***|-0.0008***|0.0003**|-0.0013***|0.0001|
||(0.0012)|(0.0005)|(0.0011)|(0.0004)|(0.0001)|(0.0001)|(0.0001)|(0.0001)|
|Lagged frm shock GDP growth import sources|-0.1273***|-0.0232***|-0.1228***|-0.0182***|0.0013***|0.0007***|-0.0017***|0.0001|
||(0.0012)|(0.0006)|(0.0011)|(0.0005)|(0.0001)|(0.0001)|(0.0001)|(0.0001)|
|Observations|467,114|464,907|458,657|456,352|436,714|434,453|332,779|330,622|
|R-squared|0.1565|0.8926|0.1924|0.9069|0.0098|0.2189|0.2142|0.8564|
|2-digit industry X Year FE|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|State X Year FE|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|Firm FE|No|Yes|No|Yes|No|Yes|No|Yes|

_Note:_ Robust standard errors clustered at the firm level in parentheses. ***, **, and * indicate significance at 1%, 5%, and 10% levels, respectively. FE stands for Table D5: Firm Performance Outcomes’ Adjustment to Time-Varying Shock

||Net<br>revenues|Materials<br>(log)|Materials<br>per worker (log)|Capital<br>(log)|Capital<br>per worker (log)|TFP<br>L-P (log)|Labor<br>productivity (log)|Proft<br>rate|
|---|---|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|
|Lagged frm shock GDP growth export destination|-0.0078***|-0.0079***|-0.0024***|-0.0158***|-0.0082***|-0.0051***|-0.0027***|-0.0005**|
||(0.0006)|(0.0009)|(0.0008)|(0.0016)|(0.0014)|(0.0008)|(0.0007)|(0.0002)|
|Lagged frm shock GDP growth import sources|-0.0072***|-0.0071***|-0.0023**|-0.0124***|-0.0073***|-0.0054***|-0.0036***|-0.0007***|
||(0.0006)|(0.0010)|(0.0009)|(0.0017)|(0.0016)|(0.0009)|(0.0008)|(0.0002)|
|2-digit industry X Year FE|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|State X Year FE|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|
|Firm FE|Yes|Yes|Yes|Yes|Yes|Yes|Yes|Yes|

_Note:_ Robust standard errors clustered at the firm level in parentheses. ***, **, and * indicate significance at 1%, 5%, and 10% levels, respectively. L-P refers to Levinsohn & Petrin (2003). FE stands for fixed effects.

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