Who is at the Center of the Global Supply Chain?

Abstract

We study the network structure of the global supply chain, using trade in value-added data for 67 economies and 45 industries. We find that, in the global manufacturing network, a few hub economies such as China, US, Germany, Japan, and Russia drive the global and regional trade flows, but have low dependence on foreign sourcing. Building fine-grained global networks linking economy-industry pairs, we find that the structural importance of an economy-industry pair in the global supply chain drives its contribution to global economic and stock market fluctuations. These results provide fresh evidence supporting the network origins of global economic fluctuations.

Keywords: global supply chain, networks, centrality

JEL Classification: F1, F2, F4, F6, G1