This paper strives to contribute three things to the literature. The first is a line-sketch theory model that puts consumers into the value chain. It emphasizes the value-creating aspect of superior matching between consumers preferences and the varieties when they can purchase online (and thus have access to a broader range of varieties than is available locally). We indirectly test this by estimating the impact that AliExpress has on exports. AliExpress data is unique in that only Chinese firms can sell and only non-Chinese can buy on the platform. Third, we provide evidence that the introduction of such platforms can support export of domestic value added.
Dozens of governments have banned or limited exports of vital medical supplies and food. Are these legal under WTO and EU law? This chapter argues that while such bans are not allowed in normal times, the rules do not apply when the measures are justified on health grounds, are temporarily applied, and are aimed at preventing or relieving critical shortages of essential products. The only real deterrent to export bans is the threat of foreign retaliation that cuts off access to indispensable imports.
After decades of globalisation and integration, the world seems to be fragmenting again, epitomised best, perhaps, by the return of geopolitics, protectionism, unilateral sanctions, treaty withdrawals, and even military and economic coercion. Challenged by the United States, the return of old (Russia) and the growing assertion of new (China) antiliberal powers, the multilateral system is shaken both in its normative foundations and its operational capacity.
An integral part of global supply chains is the selection by international buyers of trading partners in developing countries. However, our understanding of how buyers ﬁnd a suitable long term supplier is limited. I use unique buyer-seller customs data to directly observe experimentation activity in a large market - the "fast fashion" industry in Bangladesh. I study how buyers of ready-made garments conduct trials of suppliers at the order-product level before settling into sustained sourcing relationships. To illustrate this process, I use a model of idiosyncratic search costs where the buyer’s costs of testing a manufacturer are determined by the heterogeneity of potential suppliers. The model shows that (1) higher supplier heterogeneity is associated with lower experimentation, (2) as heterogeneity increases, search activity falls more markedly for larger buyers than for their smaller counterparts, and (3) while buyer-seller matches are positively assortative, more heterogeneous settings see all buyers -and more markedly, large buyers- willing to accept relationships with (weakly) worse suppliers. These implications are strongly supported by the data, and hold in terms of within-buyer, cross-market diﬀerences in experimentation behavior. Finally I show that these information frictions, rooted in supplier heterogeneity, matter for the distribution of rents in these relationships: price-cost margins for suppliers are positively related to the degree of heterogeneity in the environment.