Global sourcing patterns, domestic institutions, and commercial arbitration environments
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Park, Se Mi. “Global Sourcing Patterns, Domestic Institutions, and Commercial Arbitration Environments.” Economics Bulletin 45, no. 1 (2025): 495–506. https://ideas.repec.org//a/ebl/ecbull/eb-25-00113.html
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Abstract
This paper empirically examines how the quality of national arbitration institutions affects global sourcing patterns of intermediate inputs. Higher-quality arbitration institutions provide better enforcement of an arbitral award and easier access to commercial arbitration. I find that global sourcing shrinks when transactions are more dependent on relationships between traders. This negative impact is better mitigated when each source and destination country's arbitration institutions are of higher quality.