The Impact of Supply Chain on Political Relationships—— An Empirical Research Utilizing Cross Border Panel Data(2007—2020)

This article explores the impact of trade in the supply chain era on international political relationships,utilizing panel data from 60 countries spanning the years 2007 to 2020.Multiple indicators measuring political relationships between countries are constructed based on United Nations General Assembly voting data,while supply chain relationships between countries are based on value-added trade data.Through instrumental variable estimation,the research reveals that higher levels of supply chain trade between two countries are associated with friendlier political relationships.Moreover,the article distinguishes between various types of supply chain relationships and conducts exploratory analysis.The study finds that close-knit and complex supply chain relationships have a significantly stronger promoting effect on political relationships compared to loose and simple relationships.Furthermore,the more symmetric the supply chain relationship between two countries,the deeper the involvement of each party in the international division of labor,and the more distinct their roles in the global production system,the stronger the promoting effect of supply chain relationships on political relationships.Based on the findings of this study,it is suggested that in the context of global supply chain restructuring,it is essential to transcend the traditional perspective of trade and approach China’s foreign trade from a supply chain standpoint.Shifting from “trade diplomacy” to “supply chain diplomacy” can truly establish trade relationships as the foundation of political relationships.