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The Institute’s key research themes
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Businesses are crucial to solving
the UK’s productivity problems.

We’re a UK-wide research
organisation exploring what
productivity means for business

Businesses are crucial to solving
the UK’s productivity problems.


Exploring the relationship between supply chain productivity, resilience and spillovers

This research explores the effect of supply chain linkages on (1) productivity, (2) resilience and (3) the relationship between productivity, resilience and spillovers. In so doing, it builds on some data that are currently being constructed under our previous ESRC project “from productivity to prosperity”. This uses some unique data constructed from Bloomberg which has been used to construct a number of 4 tier supply chains over a number of years.

Existing literature, where it considers “supply chain effects”, uses input-output (I-O) tables to infer supply chain linkages among firms, which is imperfect as it cannot distinguish between the effects generated by for example knowledge transfer due to buyer-supplier arrangements, and more genuine “externalities”. This project contributes to this literature by investigating the productivity (and resilience) spillovers from actual vertical linkages amongst supply chain participating firms.

By using unique data constructed from the Bloomberg database, this research allows for the construction of a number of supply chains over a number of years based on supply chain relationships amongst firms.
Along with a more traditional productivity approach, the project applies a novel two-stage (random parameter) empirical strategy, which firstly estimates the average effect of vertical linkages on productivity spillovers across chains (and firms), and secondly estimates individual-specific coefficients of our variable of interest (i.e. supply chain linkages) to investigate the characteristics driving heterogenous returns across chains (and firms).

Project lead Nigel Driffield (The University of Warwick)