## Scalable Suppliers in Global Trade Networks

_IMF Working Papers, August 28, 2026_

## Source details

**Canonical URL:** [Scalable Suppliers in Global Trade Networks](https://www.imf.org/en/publications/wp/issues/2026/08/28/scalable-suppliers-in-global-trade-networks-579195)

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## Bibliographic details
- Authors: Brandon Joel Tan
- Published: August 28, 2026
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229060691.001

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### Key findings
- 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:
  - Supplier bottlenecks substantially attenuate the export and welfare gains from a global demand expansion.
  - Relationship stickiness determines where bottlenecks bind.
- Counterfactual analysis shows:
  - 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.

### Methods and model
- Empirical approach:
  - 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.
- Theoretical framework:
  - Multicountry, multi-sector general-equilibrium trade model with input-output linkages.
  - Incorporates heterogeneous upward-sloping supplier supply curves.
  - Incorporates gradually adjusting sourcing relationships to capture relationship stickiness.

### Policy-relevant implications
- Target supplier upgrading interventions to parts of the production network that are:
  - Economically central.
  - Relationship-sticky.
  - Exposed to supplier bottlenecks.
- 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 and keywords
- 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

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- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2026/08/28/scalable-suppliers-in-global-trade-networks-579195_