{"id":427127,"date":"2025-06-11T10:37:57","date_gmt":"2025-06-11T08:37:57","guid":{"rendered":"https:\/\/www.wifo.ac.at\/publication\/427127\/"},"modified":"2025-06-11T11:38:03","modified_gmt":"2025-06-11T09:38:03","slug":"eu-supply-chain-regulations-between-efficiency-and-effectiveness","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/427127\/","title":{"rendered":"EU Supply Chain Regulations between Efficiency and Effectiveness"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-427127","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"","text":"The newly introduced EU supply chain regulation emphasises the importance of enforcing social and environmental rules, particularly in third countries. For example, the EU's Corporate Sustainable Due Diligence Directive holds importing firms accountable for breaches in their supply chains. Following fierce criticism regarding the compliance costs of the regulation, the European Commission has amended the regulation as part of the so-called \"Omnibus Package\". Against this backdrop, this paper discusses the regulation, recognising that regulators must balance the trade-off between effectiveness and cost-efficiency. The Omnibus Package limits the liability of companies to the first tier. While this reduces bureaucratic costs, it also undermines the scope and effectiveness of the regulation to a greater degree. This is because many companies that are potentially in breach are likely to be active in the second and lower tiers. Nevertheless, elevated due diligence expenses and opaque supply chains act as counterarguments to a more extensive delineation of in scope companies. Adopting systemic solutions to supply chain regulation rather than idiosyncratic, non-standardised due diligence procedures would be a more effective way of addressing these issues.","onlinedate":"2025-06-11 08:37:58","lang":"English","publication_series":"","publication_date":"20250610","publication_date_year":"","publication_date_full":true,"publication_num_pages":"11","keywords":"[]","jelcodes":"[\"F13\",\"F18\",\"J80\"]","related_publications":"[\"c599e9a2-cf58-47d2-b15e-51512eb827e3\"]","pdf":427142,"zip":null,"link":"","monthly_report":true,"monthly_report_main":false,"monthly_report_volume":"","monthly_report_pages":"","monthly_report_pages_sort":"0","issue":"706","journal":"WIFO Working Papers","publisher":"\u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung","invisible":false,"external":false,"embargo_date":null,"types":[44410],"research_groups":[3491],"collaboration":"","persons":[4986,3587,18217,4377,18213],"persons_data":"[{\"personId\":4986,\"personName\":\"Gabriel Felbermayr\",\"organisationNames\":[]},{\"personId\":3587,\"personName\":\"Klaus Friesenbichler\",\"organisationNames\":[]},{\"personId\":18217,\"personName\":\"Markus Gerschberger\",\"organisationNames\":[\"ASCII\",\"FH O\u00d6, Logistikum, Josef Ressel Centre for Real-Time Value Network Visibility\"]},{\"personId\":4377,\"personName\":\"Birgit Meyer\",\"organisationNames\":[]},{\"personId\":18213,\"personName\":\"Peter Klimek\",\"organisationNames\":[\"ASCII\",\"CSH Vienna\",\"MedUni Wien\"]}]","clients":[10980,10848],"subclients":[],"partners":[8870,256243],"topics":[125684],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","citations":"{\"apa\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_apa rendering_contributiontoperiodical rendering_apa rendering_contributiontoperiodical_apa\\\"><span>Felbermayr, G.<\\\/span><span>, Friesenbichler, K.<\\\/span>, Gerschberger, M.<span>, Meyer, B.<\\\/span>, &amp; Klimek, P. (2025). <span>EU Supply Chain Regulations between Efficiency and Effectiveness<\\\/span>. <span><em>WIFO Working Papers<\\\/em><\\\/span>, (706).<\\\/div>\",\"vancouver\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_vancouver rendering_contributiontoperiodical rendering_vancouver rendering_contributiontoperiodical_vancouver\\\"><span>Felbermayr G<\\\/span><span>, Friesenbichler K<\\\/span>, Gerschberger M<span>, Meyer B<\\\/span>, Klimek P. <span class=\\\"title\\\"><span>EU Supply Chain Regulations between Efficiency and Effectiveness<\\\/span><\\\/span>. <span>WIFO Working Papers<\\\/span>. 2025 Jun 10;(706).<\\\/div>\",\"bibtex\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_bibtex rendering_contributiontoperiodical rendering_bibtex rendering_contributiontoperiodical_bibtex\\\"><div>@misc{58ea8db83ce34da288df107327b7b7a2,<\\\/div><div>  title     = \\\"EU Supply Chain Regulations between Efficiency and Effectiveness\\\",<\\\/div><div>  abstract  = \\\"The newly introduced EU supply chain regulation emphasises the importance of enforcing social and environmental rules, particularly in third countries. For example, the EU's Corporate Sustainable Due Diligence Directive holds importing firms accountable for breaches in their supply chains. Following fierce criticism regarding the compliance costs of the regulation, the European Commission has amended the regulation as part of the so-called {\\\"}Omnibus Package{\\\"}. Against this backdrop, this paper discusses the regulation, recognising that regulators must balance the trade-off between effectiveness and cost-efficiency. The Omnibus Package limits the liability of companies to the first tier. While this reduces bureaucratic costs, it also undermines the scope and effectiveness of the regulation to a greater degree. This is because many companies that are potentially in breach are likely to be active in the second and lower tiers. Nevertheless, elevated due diligence expenses and opaque supply chains act as counterarguments to a more extensive delineation of in scope companies. Adopting systemic solutions to supply chain regulation rather than idiosyncratic, non-standardised due diligence procedures would be a more effective way of addressing these issues.\\\",<\\\/div><div>  keywords  = \\\"Omnibus, due diligence, EU, supply chains, regulation, effectiveness, efficiency\\\",<\\\/div><div>  author    = \\\"Gabriel Felbermayr and Klaus Friesenbichler and Markus Gerschberger and Birgit Meyer and Peter Klimek\\\",<\\\/div><div>  note      = \\\"Forthcoming in Intereconomics\\\",<\\\/div><div>  year      = \\\"2025\\\",<\\\/div><div>  month     = jun,<\\\/div><div>  day       = \\\"10\\\",<\\\/div><div>  language  = \\\"English\\\",<\\\/div><div>  journal   = \\\"WIFO Working Papers\\\",<\\\/div><div>  publisher = \\\"{\\\\\\\"O}sterreichisches Institut f{\\\\\\\"u}r Wirtschaftsforschung\\\",<\\\/div><p>}<\\\/p><\\\/div>\",\"ris\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_ris rendering_contributiontoperiodical rendering_ris rendering_contributiontoperiodical_ris\\\"><p>TY  - GEN<\\\/p><p>T1  - EU Supply Chain Regulations between Efficiency and Effectiveness<\\\/p><p>AU  - Felbermayr, Gabriel<\\\/p><p>AU  - Friesenbichler, Klaus<\\\/p><p>AU  - Gerschberger, Markus<\\\/p><p>AU  - Meyer, Birgit<\\\/p><p>AU  - Klimek, Peter<\\\/p><p>N1  - Forthcoming in Intereconomics<\\\/p><p>PY  - 2025\\\/6\\\/10<\\\/p><p>Y1  - 2025\\\/6\\\/10<\\\/p><p>N2  - The newly introduced EU supply chain regulation emphasises the importance of enforcing social and environmental rules, particularly in third countries. For example, the EU's Corporate Sustainable Due Diligence Directive holds importing firms accountable for breaches in their supply chains. Following fierce criticism regarding the compliance costs of the regulation, the European Commission has amended the regulation as part of the so-called \\\"Omnibus Package\\\". Against this backdrop, this paper discusses the regulation, recognising that regulators must balance the trade-off between effectiveness and cost-efficiency. The Omnibus Package limits the liability of companies to the first tier. While this reduces bureaucratic costs, it also undermines the scope and effectiveness of the regulation to a greater degree. This is because many companies that are potentially in breach are likely to be active in the second and lower tiers. Nevertheless, elevated due diligence expenses and opaque supply chains act as counterarguments to a more extensive delineation of in scope companies. Adopting systemic solutions to supply chain regulation rather than idiosyncratic, non-standardised due diligence procedures would be a more effective way of addressing these issues.<\\\/p><p>AB  - The newly introduced EU supply chain regulation emphasises the importance of enforcing social and environmental rules, particularly in third countries. For example, the EU's Corporate Sustainable Due Diligence Directive holds importing firms accountable for breaches in their supply chains. Following fierce criticism regarding the compliance costs of the regulation, the European Commission has amended the regulation as part of the so-called \\\"Omnibus Package\\\". Against this backdrop, this paper discusses the regulation, recognising that regulators must balance the trade-off between effectiveness and cost-efficiency. The Omnibus Package limits the liability of companies to the first tier. While this reduces bureaucratic costs, it also undermines the scope and effectiveness of the regulation to a greater degree. This is because many companies that are potentially in breach are likely to be active in the second and lower tiers. Nevertheless, elevated due diligence expenses and opaque supply chains act as counterarguments to a more extensive delineation of in scope companies. Adopting systemic solutions to supply chain regulation rather than idiosyncratic, non-standardised due diligence procedures would be a more effective way of addressing these issues.<\\\/p><p>KW  - Omnibus<\\\/p><p>KW  - due diligence<\\\/p><p>KW  - EU<\\\/p><p>KW  - supply chains<\\\/p><p>KW  - regulation<\\\/p><p>KW  - effectiveness<\\\/p><p>KW  - efficiency<\\\/p><p>M3  - WIFO series<\\\/p><p>JO  - WIFO Working Papers<\\\/p><p>JF  - WIFO Working Papers<\\\/p><p>PB  - \u00d6sterreichisches Institut f\u00fcr Wirtschaftsforschung<\\\/p><p>ER  - <\\\/p><\\\/div>\"}","scientific_assistance":"[]","scientific_review":"[]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>EU Supply Chain Regulations between Efficiency 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