Work

Systemic risk of commodity traders

Year: 2025

Type: article

Abstract: We examine the disruptions to global commodity flows following the default of a commodity trading firm. The physical commodity network is operated by a handful of large traders that are responsible for the timely delivery of raw materials and inputs to industrial production. We propose a model to simulate the resilience and response time of the network following a shock. Our results suggest that a number of commodity traders carry significant systemic risk. The forced removal of a trader from the network has considerable implications for the prices and availability of physical commodities over a period up to 12 months.

Source: Journal of Economic Dynamics and Control

DOI: 10.1016/j.jedc.2025.105166

Authors: Thorsten Glück, Zeno Adams

Institutions: RheinMain University of Applied Sciences, University of St.Gallen

Language: English

Topic: Supply Chain Resilience and Risk Management

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,270

Funders: Schweizerischer Nationalfonds zur Förderung der Wissenschaftlichen Forschung, Swiss Society of Economics and Statistics