Theory of supply chains: a working capital approach

Se-Jik Kim and Hyun Song Shin

No 1070, BIS Working Papers from Bank for International Settlements

Abstract: This paper presents a time-to-build theory of supply chains which implies a key role for the financing of working capital as a determinant of supply chain length. We apply our theory to global value chains (GVCs) and trade, where firms strike a balance between the productivity gain from longer GVCs against the greater financial cost due to longer supply chains. In equilibrium, we show the duality between GVC length and financial conditions, where more accommodative financial conditions are associated with longer GVCs.

Keywords: global value chains; offshoring; trade finance (search for similar items in EconPapers)
JEL-codes: F23 F36 G15 G21 L23 (search for similar items in EconPapers)
Date: 2023-01
New Economics Papers: this item is included in nep-cfn, nep-fdg, nep-ifn and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.bis.org/publ/work1070.pdf Full PDF document (application/pdf)
https://www.bis.org/publ/work1070.htm (text/html)

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:bis:biswps:1070

Access Statistics for this paper

More papers in BIS Working Papers from Bank for International Settlements Contact information at EDIRC.
Bibliographic data for series maintained by Martin Fessler ().