Due to unforeseen circumstances this lunch seminar has been cancelled.

Global Supply Chain Flexibility: The Role of Contracts in LNG

Abstract

This paper explores how firms design sourcing strategies that provide flexibility to adjust to demand shocks. We model buyers’ sourcing decisions in settings where goods are indivisible and trade can take place both within long-term relationships and in spot markets. Reduced-form evidence from the global LNG industry between 2009 and 2019 shows that larger buyers source from more suppliers and often from multiple suppliers within a given week. Shipments sourced through contractual relationships—which are more efficient on average—respond to buyer-specific demand shocks. Estimating the model for the same period indicates that maintaining several supplier relationships offers greater resilience to shocks than relying solely on spot markets. Counterfactual analysis suggests that adaptation within contracts contributes substantially to overall value creation in the global LNG industry.

About the speaker

Catherine Thomas is an Associate Professor of Managerial Economics and Strategy. She is the Director of the International Trade Programme at the Centre for Economic Performance and a Research Fellow of the Centre for Economic Policy Research. Catherine is a Co-Editor of Economica and an Associate Editor of Management Science. She has previously also served on the editorial boards of the Review of Economic Studies and the Strategic Management Journal. Having been the Director of the BSc Management at LSE for its first five years, she is now the Chair of the Steering Committee for the degree. Catherine is also a member of the LSE Teaching Excellence Framework sub-committee.

Language

English

This is a free seminar. Registration is mandatory