Measuring exposure to network concentration risk in global supply chains: Volume versus frequency*

In this paper, we present new referential statistics for the degree of supply chain exposure to network concentration risk. The study's contribution rests on the development of a metric that indicates network concentration in terms of the frequency of supply chain engagement with the regions of analytical concern, alongside the traditional approach based on volume measurement of value-added concentration. Japan, a country with a high propensity to encounter natural hazards, and China, under mounting geopolitical tension with the United States, are chosen as the target regions for the assessment of network concentration. In addition, the highly asymmetric structure of mutual economic dependency in the US-China relations is identified.

Automated summary

This paper presents new referential statistics for measuring the degree of supply chain exposure to network concentration risk. The authors develop a metric that indicates network concentration based on the frequency of supply chain engagement with regions of concern. Japan and China are selected as target regions for assessment, considering their propensity to encounter natural hazards and mounting geopolitical tension with the United States. Additionally, the study identifies the highly asymmetric structure of mutual economic dependency in US-China relations.