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International Buyers' Sourcing and Suppliers' Markups in Bangladeshi Garments

Julia Cajal-Grossi, Rocco Macchiavello () and Guillermo Noguera

No 13482, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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: Buyer-Driven Value Chains; Global Buyers; Markups; Sourcing Strategies (search for similar items in EconPapers)
JEL-codes: D23 F63 L11 L14 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-int
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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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