A Monte Carlo Analysis of Cost Competitiveness of Chinese and U.S. Fine Chemical Exports to Europe Under Europe’s Energy Crisis

<p>The European energy crisis, driven by geopolitical conflicts, has created a significant supply-demand gap in Europe’s fine chemical sector, necessitating reliance on imports from the United States and China. This quantitative study examined how energy, labor, and logistics costs interacted to shape the cost competitiveness of U.S. and Chinese fine chemical exports to Europe, using a Monte Carlo simulation parameterized with historical data from 2015-2023, to provide a probabilistic forecast of competitive outcomes. The findings revealed that while China holds a 76.55% probability of being the lower-cost supplier, its advantage is characterized by high volatility primarily due to its logistics component. In contrast, the U.S. demonstrates a stable and predictable cost structure, positioning it as a low-risk alternative. Sensitivity analysis identified China's logistics cost as the dominant factor influencing the competitive balance, with traditional drivers such as the U.S. energy advantage and China's rising labor costs found to be secondary. This study concluded that in global fine chemical trade, logistical resilience has eclipsed factory-gate production costs as the primary determinant of competitiveness, proposing an evolution toward a "Total Cost of Risk" framework, where cost volatility is weighed alongside the mean cost. The study provided actionable implications and recommended Europe adopt risk-adjusted sourcing strategies, China focus on de-risking its logistics channels, and the U.S. leverage its supply chain stability as a core strategic advantage</p>

Name thesis:degree_name

DBA Doctorate in Business Administration

Level thesis:degree_level

Dissertation - Public Access

Discipline thesis:degree_discipline

Business Administration

Year dc:date.available

2025

Author dc:creator

• Luo, Lin

Contributors dc:contributor

• Dr. Marguerite Chabau
• Dr. Colleen Ramos
• Dr. David Ross

• Fine Chemicals
• Cost Competitiveness
• Monte Carlo Simulation
• Supply Chain Resilience
• Global Value Chain
• Business Analytics
• Business Intelligence
• Operations and Supply Chain Management

Repository record dc:identifier

https://digitalcommons.nl.edu/diss/925

OAI identifier oai:identifier

oai:digitalcommons.nl.edu:diss-1992