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International Buyers' Sourcing and Suppliers' Markups in Bangladeshi Garments

Julia Cajal Grossi, Rocco Macchiavello () and Guillermo Noguera
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Julia Cajal Grossi: Graduate Institute, Geneva
Guillermo Noguera: Yale University and CAGE

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Large international buyers play a key role in global value chains. We exploit detailed transaction-level data on the usage of material inputs to study how Bangladeshi garment suppliers’ markups vary across international buyers. We find substantial dispersion in markups across export orders of a given seller for the same product. Buyer effects explain a significant share of this variation, while destination effects do not. Buyers adopting relational sourcing strategies pay higher markups than non-relational buyers. This pattern holds within seller-product-year combinations, is robust to controlling for the buyer’s size, traded volumes, and quality, and, together with larger volumes, implies higher profits for suppliers dealing with relational buyers.

Keywords: Markups; Sourcing Strategies; Global Buyers; Buyer-Driven Value Chains JEL Classification: L11; L14; D23; F63 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-hme, nep-ind and nep-int
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https://warwick.ac.uk/fac/soc/economics/research/c ... hiavello_noguera.pdf

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Working Paper: International Buyers' Sourcing and Suppliers' Markups in Bangladeshi Garments (2019) Downloads
Working Paper: International Buyers' Sourcing and Suppliers' Markups in Bangladeshi Garments (2019) Downloads
Working Paper: International buyers' sourcing and suppliers markups in Bangladeshi garments (2019) Downloads
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