Oscar Ignacio Perello Perez from The Inter-American Development Bank Group will present "Trade Intermediation and Resilience in Global Sourcing".

Abstract: This paper shows that intermediation services help firms mitigate supply chain risk. Combining customs and tax records from Chile, I document that the share of intermediated imports rises with origin-product risk, as intermediaries offer larger supply networks with more stable relationships. Fewer firms source directly from risky markets, but larger producers maintain more suppliers. These facts motivate a model of input sourcing with costly supplier matching, insecure supply links, and access to intermediaries. More productive firms diversify suppliers, while less productive firms pay a markup to use intermediaries. Despite double marginalization, intermediaries relax the efficiency-risk trade-off and halve disruption costs for firms that lack the scale to diversify. Intermediation thus allows firms to outsource supply chain resilience, broadening the gains from global sourcing for smaller producers.