Incomplete Contracts in Global Value Chains

This chapter explores the concept of incomplete contracts in global value chains (GVCs), highlighting the limitations of using trade statistics to understand GVCs and discussing methods to gather evidence and fill in gaps in understanding. It also examines the role of foreign buyers in financing trade in GVCs and emphasizes the importance of flexibility and reliability in these relationships. Lastly, it discusses the coexistence of stable long-term trading relationships and spot market transactions in competitive markets.