The Laffer Curve Effect of Preferential Rules of Origin on Regional Supply Chain Sustainability and Resilience

This paper develops a theoretical model to analyze the protective effect and nonlinear mechanism of preferential rules of origin (ROOs) on regional supply chains amid global value chain restructuring and rising regional supply chain security demands. Supported by numerical simulations and a triple difference-in-differences (DDD) empirical approach based on the China–ASEAN Free Trade Agreement (CAFTA), the findings reveal a nonlinear, inverted U-shaped relationship between ROO stringency and supply chain stability—exhibiting a typical Laffer curve characteristic. Moderate restrictions significantly promote intra-regional intermediate goods procurement and stabilize regional supply chain layout, while excessively stringent rules raise enterprise compliance costs and restrain integration. These findings carry important implications for regional economic resilience and sustainable development. While our empirical analysis focuses on economic resilience (measured through regional procurement stability), we discuss how well-designed ROO may also support broader sustainability goals, including contributions to SDG 8 (Decent Work and Economic Growth) and SDG 17 (Partnerships for the Goals) through more stable and inclusive regional production networks. The study highlights the need for careful calibration of ROO stringency to balance protective effects with compliance costs in pursuit of both resilient and sustainable regional trade governance.