How Global Are Local Value Chains?

<jats:p>This paper examines how foreign input-cost shocks transmit through domestic supply chains, shaping local economic vulnerabilities. Using detailed firm-to-firm domestic and foreign transaction data, we quantify the direct and indirect exposure of Italian labor markets to imports from China and from other extra-EU source markets. We assess the importance of firms' domestic and foreign sourcing linkages for overall exposure and highlight the critical role of wholesalers and top importing firms within the domestic network in shaping tail risks. Marked local disparities in exposure reveal that aggregate import statistics conceal substantial and uneven regional vulnerabilities.</jats:p>