International buyers' sourcing and suppliers' markups in Bangladeshi garments

Cajal-Grossi, Julia, Macchiavello, Rocco ORCID: 0009-0007-5465-3153 and Noguera, Guillermo (2019) International buyers' sourcing and suppliers' markups in Bangladeshi garments. CEP Discussion Papers (CEPDP1598). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

Large international buyers play a key role in global value chains. We exploit detailed transaction-level data on the usage of material inputs to study how Bangladeshi garment suppliers' markups vary across international buyers. We find substantial dispersion in markups across export orders of a given seller for the same product. Buyer effects explain a significant share of this variation, while destination effects do not. Buyers adopting relational sourcing strategies pay higher markups than non-relational buyers. This pattern holds within seller-product-year combinations, is robust to controlling for the buyer's size, traded volumes, and quality, and, together with larger volumes, implies higher profits for suppliers dealing with relational buyers.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2019 The Authors
Divisions:	Management
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce H Social Sciences > HC Economic History and Conditions
JEL classification:	L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L14 - Transactional Relationships; Contracts and Reputation; Networks D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
Date Deposited:	25 Nov 2019 11:03
Last Modified:	11 Dec 2024 19:32
URI:	http://eprints.lse.ac.uk/id/eprint/102612

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