From supply chain networks to diplomatic alignment: a dynamic network analysis using temporal ERGMs

Global supply chains link states through the cross-border flow of intermediate goods, and countries occupy heterogeneous positions like upstream suppliers or downstream assemblers that affect their leverage. The research investigates how a country's position within these networks translates into institutionalized cooperation and diplomatic behavior. This study focuses on the linkage between upstream chemical inputs (C20) and downstream manufacturing (C26). It posits that supply-chain capital, derived from upstream control over intermediate goods, can be converted into institutional ties via strategic partnerships. The research uses Temporal Exponential Random Graph Models (TERGMs) to analyze how these linkages influence partnership formation and subsequent alignment in UNGA voting.
The analysis suggests that China’s upstream position in chemical inputs increases the likelihood of forming strategic partnerships. Furthermore, established partnerships mediate this relationship, leading partner states to converge toward China’s positions in international forums like the UNGA. This implies that supply-chain linkages create a pathway where economic interdependence leads to institutionalized cooperation and subsequent diplomatic alignment, moving beyond traditional security alliance models.

* The study analyzes supply-chain linkages between chemical inputs (C20) and computer/electronic products (C26) using OECD Trade in Value Added (TiVA) data from 1995 to 2020.
* Temporal Exponential Random Graph Models (TERGMs) are employed to analyze network dependence, tie formation, and temporal dynamics.
* The study uses a binary variable, VS Out, to represent China’s role as an upstream exporter of C20 intermediates in the C20–C26 supply chain.
* The dependent variables are a binary indicator for concluding a Chinese-style strategic partnership and a continuous measure of diplomatic alignment based on UNGA voting data.
* The independent variable is the Vertical Specialization share ($\text{VS share}{i,j,t}^{C20\to C26}$), which measures the proportion of value added in downstream exports originating from upstream suppliers.
* The analysis incorporates covariates such as GDP per capita, population size, democracy scores (V-Dem), and public support for the One-China policy on Taiwan.
* Hypothesis H1 posits that higher out-degree centrality of China in global supply chains increases the probability of forming Chinese-style strategic partnerships.
* Hypothesis H2 posits that established strategic partnerships mediate the effect of supply-chain network embeddedness on diplomatic alignment.
* The empirical analysis uses TERGMs with a logit link to estimate relationships between these variables, incorporating terms for network dependence and transitivity.

The structure of this research moves from mapping objective economic realities (supply chains) to theorizing the political consequences of those structures. The core insight is that structural positions within global production networks—specifically upstream control over critical intermediate goods—generate "supply-chain capital," which can be institutionalized through strategic partnerships, thereby shaping diplomatic outcomes. This process operates on a layered mechanism: network position (out-degree) leads to partnership formation ($\text{H1}$), and the resulting partnership acts as an institutional mediator that forces diplomatic convergence ($\text{H2}$).
The tension observed between structural realism (expecting friction) and functionalist/neoliberal institutionalism (expecting cooperation via reduced transaction costs) is crucial. The finding that partnerships are conditional on existing supply-chain ties ($\text{VS Out}$) suggests that economic structure acts as a necessary precondition for political alignment, rather than being merely a contextual factor. This reframes interdependence: it is not simply a source of potential conflict or benign spillover, but an active mechanism—a system where network asymmetry dictates the terms of institutional engagement. The "weaponization of interdependence" manifests less through explicit coercion and more through the structuring of cooperation itself, channeling economic necessity into diplomatic alignment.
The analytical challenge lies in isolating whether the observed convergence is a result of deep structural embedding or simply the strategic deployment of partnership framing by China operating within existing constraints. Future inquiry should explore the differential impact across various sectors beyond C20/C26 and test whether this mechanism holds when analyzing non-China-centric partnerships, to determine if the network structure creates universal institutional incentives regardless of the specific actor.