Risks and Global Supply Chains: What We Know and What We Need to Know

Freeman, Rebecca

doi:10.2139/ssrn.3936008

Cited by 13 publications

(20 citation statements)

References 87 publications

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“…In summary, managing market focus from a global perspective, instead of regional preferences, will be an important policy for long-term growth (due to the innovation effect). This also contributes to the diversity of goods as well as markets, which not only boosts its welfare/GDP but also improves recovery dynamism (Alfaro & Chen, 2012;Jain et al, 2017) from any negative shocks; thus, policies that encourage diversification of foreign suppliers' lower volatility by reducing the exposure to individual economies (Baldwin & Freeman, 2021). Also, building a positive environment, under which firms can extend their production fragmentations, leads to extending GVC participation among the different regions and improving African countries' participation in GVC, consequently, they may specialize in more technologyintensive sectors.…”

Section: Policy Discussion and Suggestionsmentioning

confidence: 99%

“…This high volume of export/import among sector-country pairs raises a question about how we can measure "Made in Japan, who produced whom." One of the possible answers is foreign input reliance which takes account of the infinite sequence of all the inputs into all the inputs as known the Leontief inverse matrix (Baldwin & Freeman, 2021). However, it can be said that the contribution of the intermediate inputs to Value-Added (VA) seems to not be visible in an aggregated dataset because there is more than one-way of intermediate trade between partners and this integration is difficult to disaggregate to the level of companies or production stages (see Alfaro et al (2019) and Li et al (2019) for complex global supply chain).…”

Section: Introductionmentioning

confidence: 99%

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Double Counting in Mystery: Journey of Intermediate Products in Multi-Country Trade

Biyik

2022

Preprint

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This study analyzes the production concept of the Value-Added (VA) chain by applying an alternative framework, as this concept is the main driver of the VA embodied in the intermediate export. VA supply chain spillover (upstream and downstream) of the production activities is investigated. The focal point of this study is to extend Global Value Chains (GVC) based on the multilevel and bilateral trade flow. In brief, there are two main contributions of this paper; the first begins with the originality of this work’s theory which reveals the intermediate input journey among sector-country pairs, and the second is to introduce the optimal GVC participation with the knowledge spillover effect regarding vertical (upstream and downstream) integration. In other words, this paper found that different forms of the VA with traveled products (among countries) provide more precise (sectoral/regional) integration and optimal estimation method. This paper relies on constructed Global Trade Analysis Project Multi-Region Input-Output (GTAP-MRIO) and patent panel datasets. As a result of the analysis, if the product crosses the border only twice as the product returns home to its origin country, the export/import coefficient of the sectoral linkages, which boosts VA and then causes double-counting, is about 1.54 % in terms of (single) country-level data. More importantly, with regard to its contributions with the knowledge spillover effect, traveling products among countries as twice or infinity is to contribute by 1.6% or 154%. Lastly, its contribution to VA presents 0.8% to 72%.

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Section: Policy Discussion and Suggestionsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Double Counting in Mystery: Journey of Intermediate Products in Multi-Country Trade

Biyik

2022

Preprint

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“…Attention has been focused on the issue of value chains, which have been recognized as no longer just being exposed to the risks of idiosyncratic shocks (single times, single sectors, single nations), but also to the risks of systemic shocks, mainly due to structural factors, such as climate change and sustainability, geopolitical tensions, and digital disruptive innovation. The literature has mainly studied the dynamics of risk propagation, the resilience of GVCs-i.e., the ability to bounce back after a shock-and the robustness of GVCs-i.e., the ability to continue production under shock- (Baldwin & Freeman, 2021). Obviously, systemic shocks include the exogenous one of the global COVID-19 pandemic and, in accordance with Clausewitz's dictum that war is merely a continuation of politics by other means, the endogenous shock of the Russian-Ukrainian conflict, which is the most recent expression of the current geopolitical imbalances and international competition for political supremacy.…”

Section: The Changing Structure Of Global Value Chainsmentioning

confidence: 99%

A warning from the Russian–Ukrainian war: avoiding a future that rhymes with the past

Mariotti

2022

J. Ind. Bus. Econ.

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The Russian–Ukrainian war is a dramatic effect of the growing imbalances and instability of the global economic and political order, together with other effects that this contribution analyzes. This paper in fact offers empirical evidence of a rampant “global protectionism”, the slowdown of the world’s economy in the long term, and the changing structure of global value chains. The paper also seeks to link these manifestations together in a historical perspective, considering the results of previous studies that adopted the comparative historical approach. Although there are profound differences between today’s globalized economy and its historical equivalents, learning from the past should not be precluded, as it can help avoid dangerous paths from being followed that could lead to universally undesired outcomes in the future. The aim of the paper is to open a discussion on the criteria that are needed to inform and develop an economic and industrial policy that is aware of the seriousness of future risks and capable of facing such risks with the necessary wisdom, through the concerted support of the major countries, and through international inter-state collaboration.

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“…The Covid‐19 pandemic has demonstrated the vulnerability of a globally interconnected economy. With production processes distributed all over the globe, shortages in some key industries, such as semiconductor production in Asia, had massive impacts on downstream industries in other countries (Baldwin & Freeman, 2021).…”

Section: A More Comprehensive View Of Globalizationmentioning

confidence: 99%

Globalization and climate change: State of knowledge, emerging issues, and policy implications

Jakob

2022

WIREs Climate Change

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In an integrated global economy, trade policy and climate policy are closely intertwined. This paper adopts an interdisciplinary approach to provide an overview of the key debates in economics, political science, and legal studies related to globalization and climate change. We identify a number of emerging issues that deserve increased attention in future research in this direction.These include international financial flows, migration, telecommunication, and digitization as well as changing lifestyles and consumption patterns across the globe. We also present potential research question regarding the diversification of import and export portfolios in the face of growing climate impacts and the decarbonization of industry, aviation, and shipping. Finally, we discuss how these recent developments could shape trade and climate policy formulation. We conclude that ambitious climate policies seem more likely to flourish in an open world trading system which provides sufficient flexibility for individual countries to adopt nationally appropriate climate policies.

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Risks and Global Supply Chains: What We Know and What We Need to Know

Cited by 13 publications

References 87 publications

Double Counting in Mystery: Journey of Intermediate Products in Multi-Country Trade

Double Counting in Mystery: Journey of Intermediate Products in Multi-Country Trade

A warning from the Russian–Ukrainian war: avoiding a future that rhymes with the past

Globalization and climate change: State of knowledge, emerging issues, and policy implications

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