The Impact of Global Supply Chain Vulnerability on International Trade Volume: A Panel Data Analysis

This study explores how global supply chain vulnerability affects international trade volume and examines whether logistics performance influences this relationship across countries. The analysis uses a cross-country panel of 40 economies from 2007 to 2023, limited by the availability of the Logistics Performance Index (LPI). International trade volume is measured as the logarithm of total trade, which includes exports and imports in current U.S. dollars. Global supply chain vulnerability is represented by the Global Supply Chain Pressure Index (GSCPI), while logistics capacity is measured using the World Bank’s LPI. The empirical model employs fixed-effects panel regressions with interaction terms, along with various robustness checks such as lagged specifications and alternative estimators. The findings show that increased global supply chain vulnerability significantly decreases international trade volume. However, this negative impact is notably weaker in countries with higher logistics performance, indicating that efficient logistics systems bolster trade resilience during global disruptions. Robustness tests confirm the consistency of these results across different model specifications. Overall, this research adds to the literature by providing macro-level cross-country evidence linking supply chain disruptions to trade outcomes and emphasizing logistics performance as a key factor in helping countries mitigate the impact of external shocks. Keywords: Global supply chains, international trade, logistics performance, trade resilience, panel data analysis