How Do Firms in Different Sectors Organize Their Supply Chains? Evidence from Transaction-Level Import Data

Heise et al. (2021) develop a model-based empirical measure--sellers per shipment (SPS)--to characterize how firms organize supply chains in response to a quality control problem. High SPS indicates spot-market purchasing with costly inspections, while low SPS suggests long-term relationships where buyers pay an incentive premium to prevent cheating. Here, we document intuitive variation in US importers' SPS across sectors and show that shipping characteristics such as average price, quantity shipped, and shipment frequency are in each sector consistent with the model of sourcing developed in Heise et al. (2021), providing further confidence in the measure.