Assortativity and mixing patterns in international supply chain networks

As economic globalisation increases, inclination toward domestic protectionism is also increasing in many countries of the world. To improve the productivity and the resilience of national economies, it is important to understand the drivers and the barriers of the internatiolisation of economic activities. While internatiolisation of individual economic actors is difficult to explain using traditional theories, aggregate patterns may be explained to some extent. We take a network-centric perspective to describe the extent of corporate internatiolisation in different countries. Based on Newman's assortativity coefficient, we design a range of assortativity metrics which are appropriate in the firm network context. Using these, we quantify companies' appetite for internatiolisation in relation to the internatiolisation of their partners. We use the Factset Revere dataset, which is provided by FactSet Research Systems Inc., that captures global supply chain relationships between companies. We identify countries where the level of internationalisation is relatively high or relatively low, and we show that subtle differences in the assortativity metrics used change the ranking of countries significantly in terms of the assortativity correlation, highlighting that companies in different countries are prone to different types of internationalisation. Overall, we demonstrate that firms from most countries in the dataset studied have a slight preference to make supply chain relationships with other firms which have undergone a similar level of internationalisation, and other firms from their own country. The implications of our results are important for countries to understand the evolution of international relationships in their corporate environments, and how they compare to other nations in the world in this regard.