{
  "title": "Scalable Suppliers in Global Trade Networks",
  "publication": "IMF Working Papers, August 28, 2026",
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  "summary": "Whether exporters can take advantage of increases in foreign demand depends on the scalability of their input suppliers—that is, suppliers’ ability to expand production when demand rises.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- Supplier scalability varies sharply across industries within countries.\n- Scalable suppliers tend to be connected to scalable suppliers themselves.\n- Downstream country-sectors exposed to more scalable suppliers respond more strongly to positive foreign demand shocks in sectors with relationship-sticky inputs.\n- In a calibrated multicountry, multi-sector general-equilibrium trade model with input-output linkages, heterogeneous upward-sloping supplier supply curves, and gradually adjusting sourcing relationships:\n  - Supplier bottlenecks substantially attenuate the export and welfare gains from a global demand expansion.\n  - Relationship stickiness determines where bottlenecks bind.\n- Counterfactual analysis shows:\n  - Supplier upgrading and pre-arranged access to flexible sourcing networks are most valuable when targeted toward economically central, relationship-sticky, and bottleneck-exposed parts of the production network."
    },
    {
      "heading": "Methods and model",
      "content": "- Empirical approach:\n  - Uses bilateral trade data linked to international input-output tables to measure supplier scalability at the country-industry level and to examine effects on downstream export growth.\n- Theoretical framework:\n  - Multicountry, multi-sector general-equilibrium trade model with input-output linkages.\n  - Incorporates heterogeneous upward-sloping supplier supply curves.\n  - Incorporates gradually adjusting sourcing relationships to capture relationship stickiness."
    },
    {
      "heading": "Policy-relevant implications",
      "content": "- Target supplier upgrading interventions to parts of the production network that are:\n  - Economically central.\n  - Relationship-sticky.\n  - Exposed to supplier bottlenecks.\n- Facilitate pre-arranged access to flexible sourcing networks for downstream sectors that rely on relationship-sticky inputs to amplify export and welfare gains from global demand expansions."
    },
    {
      "heading": "Subject and keywords",
      "content": "- Subject: Economic theory, Export fluctuations, Export performance, Exports, International trade, Supply elasticity\n- Keywords: IMF working papers, input supplier, production networks, Scalability, scalable supplier, supplier bottleneck, supplier scalability, trade\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2026/08/28/scalable-suppliers-in-global-trade-networks-579195"
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    "Authors: Brandon Joel Tan",
    "Published: August 28, 2026",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229060691.001",
    "Supplier scalability varies sharply across industries within countries.",
    "Scalable suppliers tend to be connected to scalable suppliers themselves.",
    "Downstream country-sectors exposed to more scalable suppliers respond more strongly to positive foreign demand shocks in sectors with relationship-sticky inputs.",
    "In a calibrated multicountry, multi-sector general-equilibrium trade model with input-output linkages, heterogeneous upward-sloping supplier supply curves, and gradually adjusting sourcing relationships:",
    "Counterfactual analysis shows:",
    "Empirical approach:",
    "Theoretical framework:",
    "Target supplier upgrading interventions to parts of the production network that are:",
    "Facilitate pre-arranged access to flexible sourcing networks for downstream sectors that rely on relationship-sticky inputs to amplify export and welfare gains from global demand expansions.",
    "Subject: Economic theory, Export fluctuations, Export performance, Exports, International trade, Supply elasticity",
    "Keywords: IMF working papers, input supplier, production networks, Scalability, scalable supplier, supplier bottleneck, supplier scalability, trade",
    "**Working Paper**"
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