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Measuring the Input Rank in Global Supply Networks

Rungi, Armando and Fattorini, Loredana and Huremovic, Kenan Measuring the Input Rank in Global Supply Networks. EIC working paper series ISSN 2279 6894.

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We introduce the Input Rank as a measure of relevance of direct and indirect suppliers in Global Value Chains. We conceive an intermediate input to be more relevant for a downstream buyer if a decrease in that input’s productivity affects that buyer more. In particular, in our framework, the relevance of any input depends on: i) the network position of the supplier relative to the buyer, ii) the patterns of intermediate inputs vs. labor intensities connecting the buyer and the supplier, iii) and the competitive pressures along supply chains. After we compute the Input Rank from both U.S. and world Input-Output tables, we provide useful insights on the crucial role of services inputs as well as on the relatively higher relevance of domestic suppliers and suppliers coming from regionally integrated partners. Finally, we test that the Input Rank is a good predictor of vertical integration choices made by 20,489 U.S. parent companies controlling 154,836 subsidiaries worldwide.

Item Type: Working Paper (EIC working paper series)
Uncontrolled Keywords: Keywords: Global Value Chains; Input Output tables; production networks; vertical integration; multinational enterprises; downstreamness JEL Codes: F23; L23; D23; C63; C67
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HF Commerce
Research Area: Economics and Institutional Change
Depositing User: Caterina Tangheroni
Date Deposited: 02 Sep 2020 14:12
Last Modified: 02 Sep 2020 14:12
URI: http://eprints.imtlucca.it/id/eprint/4078

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