<p>Global supply chain pressures, manifested through transportation costs and economic performance, significantly influence metal supply, while concurrent geopolitical phenomena render supply chains and global trade vulnerable. Within this context, this study examines the impact of global supply chain pressures on Saudi Arabia’s metal exports to 23 major consuming nations. Using monthly data from January 1998 to December 2022, we account for key production inputs (labor and capital) and external factors, including oil price shocks and both short- and long-term geopolitical risks. By employing an instrumental variable regression—using the interaction between geopolitical risks and oil price shocks as an instrument—we discover that global supply chain pressures exert a significant negative impact on Saudi Arabian metal exports. Furthermore, while short-term geopolitical risks (in continuous form) show negligible effects, long-term risks (in discrete form) have a pronounced negative impact. These findings are robust across the linear model with multilevel fixed-effects and the structural break analysis approaches, even when controlling for the impact of the COVID-19 pandemic. Consequently, we propose policy measures focused on reducing transportation costs and mitigating other key global value chain constraints through strategic negotiations and collaboration with global governance institutions to dampen geopolitical risk intensity.</p>

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Global supply chain pressures and metal trade of Saudi Arabia: do time-varying geopolitical risks matter?

  • Md. Saiful Islam,
  • Md. Monirul Islam

摘要

Global supply chain pressures, manifested through transportation costs and economic performance, significantly influence metal supply, while concurrent geopolitical phenomena render supply chains and global trade vulnerable. Within this context, this study examines the impact of global supply chain pressures on Saudi Arabia’s metal exports to 23 major consuming nations. Using monthly data from January 1998 to December 2022, we account for key production inputs (labor and capital) and external factors, including oil price shocks and both short- and long-term geopolitical risks. By employing an instrumental variable regression—using the interaction between geopolitical risks and oil price shocks as an instrument—we discover that global supply chain pressures exert a significant negative impact on Saudi Arabian metal exports. Furthermore, while short-term geopolitical risks (in continuous form) show negligible effects, long-term risks (in discrete form) have a pronounced negative impact. These findings are robust across the linear model with multilevel fixed-effects and the structural break analysis approaches, even when controlling for the impact of the COVID-19 pandemic. Consequently, we propose policy measures focused on reducing transportation costs and mitigating other key global value chain constraints through strategic negotiations and collaboration with global governance institutions to dampen geopolitical risk intensity.