Trade Intermediation and Resilience in Global Sourcing

Oscar Perello

No 2503, CEPREMAP Working Papers (Docweb) from CEPREMAP

Abstract: Supply chain disruptions hamper the gains from globalization and require costly investments in resilience. I study how input sourcing through specialized intermediaries helps firms to mitigate disruptions in risky markets. Combining customs and tax records from Chile, I document that the share of intermediated imports rises with supply chain risk, as intermediaries maintain more diversified and robust supply networks. These facts motivate a model of global sourcing with costly supplier matching, insecure supply relationships, and access to intermediaries. Heterogeneous producers balance input prices and disruption probabilities across locations to minimize expected production costs. More productive firms match with multiple suppliers per location, while less productive firms contract with intermediaries, paying higher markups for a more resilient network than they could build directly. Despite double marginalization, intermediation relaxes the efficiency-risk trade-off due to greater supply network operability. Model quantification reveals sizable profit losses from disruptions, which intermediaries halve for mid-size producers that lack the scale to diversify. Intermediation is thus instrumental for supply chain resilience, suggesting a role for policies that make these services more accessible.

Keywords: Trade; global value chains; supply chain risk; trade intermediation; diversification (search for similar items in EconPapers)
Pages: 77 pages
Date: 2025-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cepremap.fr/depot/docweb/docweb2503.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpm:docweb:2503

Access Statistics for this paper

More papers in CEPREMAP Working Papers (Docweb) from CEPREMAP Contact information at EDIRC.
Bibliographic data for series maintained by Mathieu Perona ().