Japanese Firms Shift Supply Chains from China to ASEAN Without Full Relocation
• The main paper (Doan et al. 2025) uses firm-level data on Japanese MNCs from 2009–2022 to show that geopolitical risk—measured via the GPR index and exposure to Chinese inputs/affiliates—drives gradual supply chain diversification into ASEAN, not reshoring or deglobalization.
• The IMF paper (Ahn & Tan, 2025) provides a complementary macro-model quantifying the resilience-efficiency trade-off: diversifying import sources buffers shocks but sacrifices efficiency, especially for upstream, rigid sectors—supporting the micro-level finding that firms accept some cost for risk mitigation.
• The Banco Central de Chile working paper (2024) on supply chain uncertainty and diversification reinforces the role of uncertainty as a key driver, aligning with the main paper’s emphasis on geopolitical tensions as a catalyst for incremental, not radical, reconfiguration.
• The Stockholm School of Economics paper on geopolitical rivalry over strategically important industries highlights that diversification is not uniform—it concentrates in sectors critical to national security, contrasting with the main paper’s broader manufacturing focus but sharing the theme of political alignment shaping supply chains.
• The VOX EU paper on firms’ policy preferences (Handley et al., 2024) shows that geopolitical supply chain shocks make firms more supportive of protectionist policies, directly connecting to the main paper’s finding that firms diversify rather than exit—suggesting they lobby for state-backed resilience rather than free trade.
Cross-cutting themes include a shift from efficiency-maximization to resilience-seeking, the persistence of China as a core hub despite diversification, and the growing role of government policy in shaping firm-level supply chain decisions.
The overarching takeaway: Geopolitical risk is not triggering a wholesale retreat from globalization but a targeted, incremental rebalancing—firms are “de-risking” by adding ASEAN nodes, not abandoning China, while accepting efficiency losses for resilience, a trend amplified by protectionist policy feedback loops.
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Sources: MAIN: Geopolitical risk and supply chain diversification · R1: Supply Chain Diversification and Resilience · R2: Supply Chain Diversification and Resilience · R3: Working Papers N° 1018: Supply Chain Uncertainty and Diversification 13 June 202… · R4: Geopolitical rivalry over strategically important industries: understanding the … · R5: The effects of geopolitical supply chain shocks on policy preferences of firms
• The main paper (Doan et al. 2025) uses firm-level data on Japanese MNCs from 2009–2022 to show that geopolitical risk—measured via the GPR index and exposure to Chinese inputs/affiliates—drives gradual supply chain diversification into ASEAN, not reshoring or deglobalization.
• The IMF paper (Ahn & Tan, 2025) provides a complementary macro-model quantifying the resilience-efficiency trade-off: diversifying import sources buffers shocks but sacrifices efficiency, especially for upstream, rigid sectors—supporting the micro-level finding that firms accept some cost for risk mitigation.
• The Banco Central de Chile working paper (2024) on supply chain uncertainty and diversification reinforces the role of uncertainty as a key driver, aligning with the main paper’s emphasis on geopolitical tensions as a catalyst for incremental, not radical, reconfiguration.
• The Stockholm School of Economics paper on geopolitical rivalry over strategically important industries highlights that diversification is not uniform—it concentrates in sectors critical to national security, contrasting with the main paper’s broader manufacturing focus but sharing the theme of political alignment shaping supply chains.
• The VOX EU paper on firms’ policy preferences (Handley et al., 2024) shows that geopolitical supply chain shocks make firms more supportive of protectionist policies, directly connecting to the main paper’s finding that firms diversify rather than exit—suggesting they lobby for state-backed resilience rather than free trade.
Cross-cutting themes include a shift from efficiency-maximization to resilience-seeking, the persistence of China as a core hub despite diversification, and the growing role of government policy in shaping firm-level supply chain decisions.
The overarching takeaway: Geopolitical risk is not triggering a wholesale retreat from globalization but a targeted, incremental rebalancing—firms are “de-risking” by adding ASEAN nodes, not abandoning China, while accepting efficiency losses for resilience, a trend amplified by protectionist policy feedback loops.
————————————————————
Sources: MAIN: Geopolitical risk and supply chain diversification · R1: Supply Chain Diversification and Resilience · R2: Supply Chain Diversification and Resilience · R3: Working Papers N° 1018: Supply Chain Uncertainty and Diversification 13 June 202… · R4: Geopolitical rivalry over strategically important industries: understanding the … · R5: The effects of geopolitical supply chain shocks on policy preferences of firms