The “Smile Curve”: where Value is Added along Supply Chains

In this paper we analyze where value is added along supply chains on a sample of more than 2 million of firms in the European Union. We detect a non-linear U-shaped relationship between the value added generated by firms and their position on a productive sequence, for which tasks at the top and at the bottom show higher value added. Our findings are in line with previous hypotheses on the existence of a so-called 'smile curve', resumed by both business and economic studies and discussed at length in international fora. Our results are robust to different empirical strategies for flexible functional forms. As far as we know, ours is the first firm-level successful attempt to test for value generation along supply chains. Further, we find empirical support for a phenomenon of domestic retention of value added by MNEs, which may prefer keeping at home the tasks at higher potential to safeguard present and future competitive advantages. By country, intermediate stages of production are at higher value when performed by foreign as liates, whereas domestic producers retain higher value at the very top and at the very bottom of the supply chain, organized either as independent suppliers or as domestic affiliates. Although an economic theory is still missing for explaining how and why value generation is non-linear along a typical technological sequence, here we argue that a microfoundation with firm-level data is useful for understanding the growth potential of countries' specialization patterns along different segments of supply chains

Organizing the Global Value Chain: a firm-level test

In this paper we study the organization of Global Value Chains on a sample of about 4,000 manufacturing parent companies operating more than 90,000 affiliates on a global scale, which chose to integrate at least once in the period 2004–2012. Assuming a technological sequence of production stages, a recent property rights framework (Antràs and Chor, 2013; Alfaro et al., 2015) predicts that a choice of vertical integration is crucially based on both the position of a supplier along the chain and on the relative size of demand elasticities faced by the final producer and the supplier. We positively test whether, if final demand is sufficiently elastic (inelastic), producers of final goods integrate production stages that are more proximate to (far from) the consumers. However, this is not valid for cases of midstream parents, i.e. for producers of intermediate inputs that can integrate either backward or forward along the chain. We document that midstream are at least as common as are downstream parent companies but that existing theory neglects them. In these cases, we find that demand elasticities do not play a significant role in integration choices. Interestingly, both midstream and downstream parents tend to integrate affiliates that are more proximate in segments of a supply chain. Our findings point to a role for technological determinants that may be as important as are contracting frictions in organizing Global Value Chains

Supply chain disruptions and sourcing strategies

Supply chain disruptions have recently been at the center of both academic and policy debates. After reviewing some of the emerging literature on supply chain disruptions, we discuss the role of buyers' sourcing strategies in mediating responses to such shocks. We focus on two dimensions of a buyer's sourcing strategy: relationality (the extent to which the buyer concentrates its sourcing in a few core suppliers) and just-in-time. On the one hand, theoretical models of sourcing suggest that these are complementary practices and their adoption should be positively correlated in the data. On the other hand, the two dimensions have opposing implications for supply-chain resilience to shocks. We borrow an empirical proxy for a buyer's relationality from Cajal-Grossi et al. (2023) and introduce a new proxy for a buyer's adoption of just-in-time inventory systems. Using data from the apparel global value chain we compute the two proxies and present three results: (a) the variation in both relationality and just-in-time is mostly explained by across-buyer variation, rather than product or country variation, (b) consistent with the theoretical analysis in Taylor and Wiggins (1997), relationality and just-in-time are highly correlated with each other across buyers, (c) at the onset of the global Covid-19 pandemic, buyers' overall sourced values declined relatively less for relational buyers but not for buyers with just-in-time inventory systems

Causal Inference on Networks under Continuous Treatment Interference

This paper presents a methodology to draw causal inference in a non-experimental setting subject to network interference. Specifically, we develop a generalized propensity score-based estimator that allows us to estimate both direct and spillover effects of a continuous treatment, which spreads through weighted and directed edges of a network. To showcase this methodology, we investigate whether and how spillover effects shape the optimal level of policy interventions in agricultural markets. Our results show that, in this context, neglecting interference may lead to a downward bias when assessing policy effectiveness

Does trade policy impact food and agriculture global value chain participation of Sub-Saharan African countries?

The emergence of food and agriculture global value chains (GVCs) is challenging the way scholars look at trade data, as well as how policy makers establish their trade policies. The common perception is that Sub-Saharan African (SSA) countries, unlike most Latin American and Asian countries, are not deeply integrated into global production networks. Consequently, it is believed that the border protection policies of the former may have a limited impact on GVC participation. This paper challenges this conventional knowledge in two ways. First, by decomposing bilateral gross export into its value added components, we show that the sectoral and bilateral SSA participation in GVC for food and agriculture is substantial. Second, we demonstrate that trade policies impact backward and forward value chain linkages. These results call for a refinement of trade policy priorities in SSA

Agriculture and Food Global Value Chains in Sub-Saharan Africa: Does bilateral trade policy impact on backward and forward participation?

The most recent literature on international trade highlights the key role of global value chains (GVCs) in structural transformation, development and growth. The common perception is that Africa, unlike most Latin American and Asian countries, has neither been able to intercept the main changes in trade patterns nor enter massively into global production networks. This work provides some insight into this topic. Using the EORA Input-Output Tables, we analyze whether bilateral import tariffs and shifts in trade regimes associated with regional trade agreements affect the backward participation (i.e., the use of foreign inputs for exports) and forward participation (i.e., the use of domestic intermediates in third country exports) of the SSA countries’ agriculture and food GVCs. Our results show that, despite their low world trade shares, GVC participation in SSA economies is increasing over time, mainly upstream as suppliers of unprocessed inputs. Furthermore, we show that the value added demand for SSA agricultural products primarily originates from the EU and emerging countries rather than from regional partners. Finally, by making use of a “gravity-like” identification strategy, we also find evidence that bilateral trade protection significantly affects GVC backward and forward participation in agriculture and food. These results call for a refinement of trade policy priorities in SSA

Caracterização das chuvas correspondentes a eventos extremos na bacia superior do Alto Rio Negro, Sul do BrasilCharacterization of extreme rainfall events in the Upper Rio Negro Basin, Southern Brazil

Com a utilização de ferramentas do geoprocessamento e da estatística, apresenta-se, neste trabalho, uma metodologia para caracterizar as chuvas relacionadas com eventos extremos ocorridos na bacia Superior do Alto Rio Negro, que se encontra na divisa dos estados do Paraná e Santa Catarina. A modelação de eventos extremos, utilizando modelos hidrológicos chuva–vazão, depende da quantidade e da qualidade dos dados das chuvas. O objetivo é a criação de cenários possíveis. A metodologia utilizada consiste em: a) mapear as isoietas da bacia; b) calcular a chuva média diária para a bacia e as sub-bacias; e c) agrupar estatisticamente os eventos para a bacia e as sub-bacias. Os resultados obtidos na análise multivariada foram os seguintes: a) determinaramse 4 grupos de eventos, b) os parâmetros tempo correspondente à chuva máxima (TPmMax), chuva total durante a tormenta (SPm) e a duração (D) foram os mais influentes na formação desses grupos. Da análise das isoietas, determinou-se a posição do núcleo da tormenta que, na maioria dos casos, situam-se sobre a sub-bacia de Rio Negrinho ou nas redondezas. Esses resultados possibilitam a criação de cenários mais realistas que afetam a bacia.Abstract With the use of geoprocessing and statistical tools, this study is aimed to present a methodology to characterize the rains concerning extreme events occurred in the Superior basin of the Upper Rio Negro, which is on the border of the states of Paraná and Santa Catarina. The modeling of extreme events by using hydrological rainfall–runoff models depends on the amount and quality of rainfall data. The goal is to create scenarios. The methodology consisted of: a) mapping the isohyets of the basin, b) calculating the average daily rainfall for the basin and sub-basin and c) statistically grouping events for the basin and sub-basin. The results of the multivariate analysis were: a) 4 event groups were determined, b) the time parameters corresponding to the maximum rain precipitation (TPmMax), the total rainfall during the storm (SPM) and the duration (D) were the most influential in the formation of these groups. By analyzing the isohyets it was possible to determine the storm core position which, in most cases, is located over the Rio Negro sub-basin or in the surroundings. To conclude, these results allow the creation of more realistic scenarios that affect the basin

Validation of the short version of the obsessive compulsive spectrum questionnaire

AimIn the recent years, a rising amount of research has stressed the importance of a dimensional perspective on mental disorders. In particular, the conceptualization of an obsessive–compulsive spectrum appears to be in line with the very first descriptions of Obsessive–Compulsive Disorder and has been partially acknowledged by the inclusion of the “OCD-spectrum related syndromes and disorders” section in the DSM-5. The goal of the current study is to ascertain the psychometric characteristics of the Obsessive–Compulsive Spectrum–Short Version (OBS-SV), a novel questionnaire designed to measure the complete range of obsessive–compulsive symptoms, from severe full blown to subthreshold ones.MethodsForty three subjects with a clinical diagnosis of OCD according to the Diagnostic and Statistical Manual of Mental Disorders (DSM-5); 42 subjects with a clinical diagnosis of social anxiety disorder (SAD), and 60 individuals without current or lifetime mental disorders (HC) were recruited from the Psychiatric Clinic of the University of Pisa. Subjects were assessed with the SCID-5, the Yale Brown Obsessive Compulsive Scale (Y-BOCS) and the OBS-SV.ResultsOBS-SV showed strong test–retest reliability for both the total and the domains scores, as well as a high level of internal consistency. The Pearson’s coefficients for the OBS-SV domain scores ranged from 0.771 to 0.943, and they were positively and strongly linked with one another (p < 0.001). The OBS-SV total score had a strong correlation with each of the OBS-SV domain scores. All correlation coefficients between OBS-SV and additional measures of OCS were observed to be strong, significant and positive. Both OBS-SV domain and overall score differences between diagnostic groups were found to be statistically significant. From HCs, to the SAD, up to the OC group, which had the highest values, the OBS-SV total score grew dramatically and progressively.ConclusionThe OBS-SV demonstrated significant convergent validity with other dimensional OCD measures, excellent internal consistency, and test–retest reliability. Across the three diagnostic categories, the questionnaire functioned differently, with a rising score gradient from healthy controls through SAD patients to OCD subjects