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Purpose - study aims to investigate the relationships between global value chain (GVC)-and transportation-related determinants and economic performance. Also, moderating effects of COVID-19 on the relationships are theoretically and empirically discussed. A limitation of previous studies includes their over-reliance on the opportunities of GVC participation and larger transportation. This study represents the challenges associated with them. Also, it shows how GVC and logistics can be difficult in case of a market fluctuation such as COVID-19.Design/methodology - The sample for this study includes 828 observations from 138 countries. A semi-panel data set has been used. Six observations for each country are used to empirically test the hypotheses and a Two-way cluster model is conducted.Findings - It is confirmed that GVC forward participation contributes more than the backward participation to enhance performance. Transportation infrastructure is critical, but large scales of marine and air transportations are not positive in terms of economic performance. Stricter government response to COVID-19 negatively moderates economic performance by GVC backward participation and transportation infrastructure.Originality/value - The spread of COVID-19 is causing a severe collapse of GVC and transportation. This study empirically verifies the moderating effects of the government stringency on GVC and transportation. Previous studies usually discuss a positive impact of GVC and transportation size on economic performance. However, this study aims to show various challenges behind GVC participation and large scale transportation.
ABSTRACT
Cut, cooled, packed, transported and traded all over the world, flowers represent a showcase of a worldwide integrated trade-logistics system. As one of the most perishable, vulnerable and time-critical products, speed is everything in harvesting, moving and trading of flowers. In the international trade of flowers and logistics of florticulture products, the Netherlands is the largest center of trade and logistics of flowers, taking a share of more than 40% in global cut flower export volume. When COVID-19 hit the world, this ever-moving system came to a full stop. What did this mean for the trade and logistics system? Which players were hit most? Did the crises change the system, just interrupt it or has it set the stage for developments already under way to strengthen and accelerate? This chapter presents and discusses the international position of the Dutch trade-logistics system as the most dynamic part of a worldwide flower industry. It sketches key trends in the industry over the last decade and draws a line towards possible post-COVID-19 scenarios for the worldwide flower industry and the international position of the Netherlands. The Dutch flower industry has shown incredible resilience to the external shock of COVID-19, but the crisis also has uncovered some weaknesses of the international flower industry. However, the chapter concludes that it is unlikely that these weaknesses will change the direction of developments in the sector, some of which already started to take shape in the 1970s. The chapter is based on pre-COVID-19 research and literature on the trade-logistics hub of the Netherlands, an analysis of trade and logistics data from around 2000 up to the first months of 2021, and existing economic scenarios for the flower industry and world trade. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022.
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Recent transformations following the global financial crisis of 2009, COVID-19 pandemic, supply chains disruptions and newest shocks have radically reshaped global production landscape and challenged comparative benefits of global production networks (GPN) vs global value chains (GVC) paradigms in international production analysis. The study tests the hypothesis that GPN concept allows for a better identification of structural shifts in international production structures while revealing regional patterns of cooperation. In the first section, the main methodological constraints of GVC paradigm are specified. Additionally, the reasons for the application of network-based approach to international production are outlined. The second section dissects the EU automotive manufacturing to support the theoretical propositions. While comparing GVC and GPN quantitative toolkits, the possible trade-off has been reached which is to calculate network indicators (transitivity, centrality, etc.) on the inter-country input-output tables. As a result, the hypothesis was confirmed. Specifically, betweenness centrality metric suggests that Czechia and Slovakia have immediately favoured a positive effect of the entry into the EU, whereas neither of GVC indicators reveals such a shift. Simultaneously, 2008 crisis is depicted via GVC indicators, whilst network metrics suggest no structural changes in the production system. These results corroborate to our theoretical juxtaposition of GVC/GPN approaches. The methodological cohesion of two sets of indicators further advances the views on European regional core-periphery integration and automotive production networks dynamics. At the same time, the findings may contribute to the reassessment of regional integration developments in Europe, as well as in Latin America and Eurasia. © González G. H., Sapir E. V., Vasilchenko A. D. Text. 2023.
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PurposeGlobal and interconnected supply chains are increasingly exposed to systemic risks, whereby individual failures propagate across firms, sectors and borders. Systemic risks have emerged from the decisions of individual firms, e.g., outsourcing and buffer reduction, and are now beyond their control. This paper aims to identify appropriate approaches to mitigating those risks.Design/methodology/approachSystemic risks require analyzing supply chains beyond a dyadic perspective. This study approaches the problem through the lenses of complex systems and network theories. Drawing on the lessons learned from other systemic-risk-prone systems, e.g. energy and financial networks, both in research and practice, this study analyzes the adequate level of governance to monitor and manage systemic risks in supply chains.FindingsThe authors argue that governance institutions should be mandated to overview and reduce systemic risks in supply chains from the top down, as central bankers do for the financial system. Using firm-level data and tools from network analysis and system dynamics, they could quantify systemic risks, identify risk-prone interconnections in supply chains and design mitigating measures. This top-down approach would complement the bottom-up supply chain management approach and could help insurers design policies for contingent business interruptions.Originality/valueInstead of looking at supply chains purely from the firms' angle, the perspective of insurers and governments is brought in to reflect on the governance of risks.
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As the international division of labour becomes more entrenched, the distance goods travel before they reach the final consumer increases;at least this was the case before the outbreak of the COVID-19 pandemic. International trade and cross-border cargo movements generate significant carbon emissions. Despite theoretical advances, empirical studies frequently draw contradictory conclusions and the influence of international trade on a country's decarbonization efforts is inconclusive. This study examines the carbon emissions caused by countries' transportation services on global value chains. The input–output (IO) model and the 2015 multi-regional environmental input–output table from the UNCTAD-Eora database are employed. The input–output approach was used to determine the carbon emissions generated by the transport sector, along global value chains, in 190 countries. Environmentally extended IO analysis then reallocates emissions responsibilities of the transport sector from production to consumption. The study identifies which country's transport sectors add more value or emit more CO2. Our findings indicated that: (1) the transportation industry of a country may have a detrimental effect on the environment while generating minimal economic benefit;and (2) a country's transport industry may be tightly related to global value chain operations, but does not create considerable environmental impact. Given the significant differences in emissions intensity, we propose not only calculating the production-based accounting (PBA) of CO2 emissions, but also the consumption-based accounting (CBA). If CBA emissions are lower than PBA emissions, a country's transport sector is in carbon-leakage credit. The top three countries with the highest carbon-leakage credit for the transport sector were China, Russia and USA. If carbon emissions are taken into consideration, some nations may cease to possess a comparative advantage in manufacturing and trade. © 2023, The Author(s), under exclusive licence to Springer Nature Limited.
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How do firms in global value chains react to input shortages? We examine micro-level adjustments to supply chain shocks, building on the Covid-19 pandemic as a case study. French firms sourcing inputs from China just before the early lockdown in the country experienced a relative drop in imports that increases from February to April 2020. This shock on input purchases transmits to the rest of the supply chain through exposed firm's domestic and export sales. Between February and June, firms exposed to the Chinese early lockdown experienced a 5.5% drop in domestic sales and a 5% drop in exports, in relative terms with respect to comparable non-exposed firms. The drop in foreign sales is entirely attributable to a lower volume of exports driven by a temporary withdrawal from occasional markets. We then dig into the heterogeneity of the transmission across treated firms. Whereas the ex-ante geographic diversification of inputs does not seem to mitigate the impact of the shock, firms with relatively high inventories have been able to absorb the supply shock better.
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Non-pharmaceutical interventions (NPIs) to reduce the transmission of Covid-19 had different repercussions for domestic, regional and global value chains, but empirical data are sparse on specific dynamics, particularly on their implications for value-chain stakeholders' local livelihoods. Through research including weekly phone interviews (n = 273 from May to July 2020) with panellists in six Mozambican communities, our research traced firstly how the baobab and charcoal value chains were affected by Covid NPIs, particularly in terms of producers' livelihoods. Secondly, we ask how our findings advance our understanding of the role of civic-based stakeholder conventions and different types of power in building viable local livelihoods. Our conceptual lens is based on a synthesis of value-chain and production-network analysis, convention theory and livelihood resilience focusing on power and risk. We found that Covid trading and transport restrictions considerably re-shaped value chains, albeit in different ways in each value chain. The global baobab value chain continued to provide earnings particularly to women, when other income sources were eliminated, with socially oriented stakeholders altering their operations to accommodate pandemic restrictions. By contrast, producers involved in the domestic, solely market-oriented charcoal value chain saw their selling opportunities and incomes reduced, with hunger rising in charcoal-dependent communities. Our paper argues that local livelihoods were more resilient under Covid NPIs if civic-based conventions and collective, social power were present.
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Purpose: The aim of this paper is to explore the changes in the ICT and global value chains (GVCs) after the COVID-19 pandemic. Design/methodology/approach: This study compared the difference between Korea' domestic ICT industries, ICT imports and ICT exports before and after the COVID-19 outbreak by using trade data of ICT products and national economic indicators, and presents growth strategy for the ICT industry in the post-COVID 19 era. For this purpose, this study determined the causalities between Korea's imports/exports of ICT products and composite Indexes before and after COVID-19, and derived implications in the ICT industry environment after the COVID-19 pandemic. Findings: Analysis results showed the following changes in Korea's ICT industry in the post-COVID-19 world. (1) Non-face-to-face and contact-free technologies related sectors in the ICT industry, such as the semiconductor sector, have grown exponentially;(2) as the USA has grown as the new key player, the causal relationship with China, a key player of the GVC in the pre-COVID-19 era, disappeared;and (3) the GVC of the ICT industry is not a rigid one-way vertical structure, but is changing to a flexible structure influenced by cooperation and competition between countries. Originality/value: The results indicate that it is essential to constantly develop new ICT sectors that make use of non-face-to-face and contact-free technologies in the post-COVID-19 era, and the main strategies in response to the changed GVC would be taking the initiative by securing source technologies and expanding through cooperation with other GVCs and resource sharing. © 2022, Emerald Publishing Limited.
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This paper evaluates ways in which labour issues in global value chains for medical gloves have been affected by, and addressed through, the COVID-19 pandemic. It focuses on production in Malaysia and supply to the United Kingdom's National Health Service and draws on a large-scale survey with workers and interviews with UK government officials, suppliers and buyers. Adopting a Global Value Chain (GVC) framework, the paper shows how forced labour endemic in the sector was exacerbated during the pandemic in the context of increased demand for gloves. Attempts at remediation are shown to operate through both a reconfigured value chain in which power shifted dramatically to the manufacturers and a context where public procurement became higher in profile than ever before. It is argued that the purchasing power of governments must be leveraged in ways that more meaningfully address labour issues, and that this must be part of value chain resilience. © 2022 The Authors. Global Networks published by John Wiley & Sons Ltd.
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Global value chains (GVCs) hold important potential for transformations to sustainability in a context of climate change. Yet, their potential for sustainability may depend on whether, and how, promising individual innovations can foster broader change, disrupting the current unsustainable, inequitable values and paradigms in which they are enmeshed. In this article, I present an action research study of a global coffee value chain, extending geographically from Guatemala to North America. I describe the lead firm's relational governance, a defining characteristic of which is its mentoring-driven approach to social and environmental upgrading, in which producers and buyers collaborate, learn together, and mutually solve problems, in a context of overlapping economic, social, and environmental challenges. Three key strategies for relational governance used by the lead firm include fostering collaboration and trust, providing support for producing regions, and buying above the cost of production. I examine how this relational governance has been helpful in responding to the interconnected challenges and unexpected global-change phenomena, such as climate change as well as the COVID-19 pandemic, in the coffee sector. Findings suggest that this relational governance approach helped actors to respond generatively to unprecedented, shared challenges and helped support greater sustainability overall.
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This paper presents a bibliometric analysis of the global value chains (GVC) research fi-eld. To identify the most influential authors and contributions, potential collaboration networks, most discussed topics, and areas of further rese-arch opportunities within or related to the GVC research field, we applied the five most common bibliometric methods, namely citation, co -citati-on, co-author, and co-word analysis, and bibli-ometric coupling method. Our dataset for quan-titative analysis of available articles, authors, and publication outlets in the GVC research field includes 2,506 articles, book chapters, bo-oks, and conference papers from 1,047 different sources in the Web of Science database published between the years 1999 and 2021. Our analysis provided a structured and thorough bibliometric overview of the GVC research field, including the years of the COVID-19 pandemic. The results show that the most frequently researched topics include GVC governance, trade, innovation, and production networks. We also identified future GVC-related bibliometric research streams, such as linking GVCs to international sourcing, corpo-rate functions, and firm performance.
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Despite the growing protectionist policies from major developed and developing countries, multinational corporations (MNCs) tend to adjust their current efficiency-oriented global value chains (GVCs) to more resilient ones, instead of reshoring overseas businesses back home. In this respect, this chapter seeks to introduce a comprehensive framework across four directions: agile response, alternative routes, diversification, and sustainability orientation, for establishing resilient GVCs in the pandemic era. In reviewing and reorganizing the suggestions of existing studies, this chapter argues firms need to be more globalized while maintaining the key principles of GVCs. As such, countries will also need to improve their national business environment and make it more attractive for firms to locate parts of the entire GVCs in their countries. This chapter takes two countries: Vietnam and Singapore - as examples which have been widely recognized as successful countries that have opened up their economies and utilized international resources for economic development. This chapter shows that despite the potential challenges from the global pandemic, both countries tend to push forward the globalization of their economy and introduce various measures, such as strengthening the global relations with other economies and investments for digital transformations, to upgrade their positions in the GVCs. © 2022 by World Scientific Publishing Co. Pte. Ltd.
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PurposeAntibiotics shortages have become an increasingly common problem in Europe because of several reasons, including the offshoring of the production of active pharmaceutical ingredients for many of these products to low production cost countries, such as China and India. The problem has deteriorated because of the Covid-19 crisis that has put most global value chains (GVCs) under great stress. This situation has boosted extensive discussions among academics, practitioners and policymakers on possible changes to the configuration of GVCs. This paper aims to focus specifically on antibiotics supply chains from the perspective of a small country (Sweden), and analyse the pros and cons of backshoring and nearshoring alternatives, as a means to reduce drug shortages. Design/methodology/approachThis work adopts a systemic perspective to capture the implications of reshoring for the different stakeholders involved in the antibiotics field. The present meso-analysis, focusing at the industry level, is based on multiple sources of primary data collected between 2014 and 2021, including participation in policy-related projects and interviews with over 100 representatives of key stakeholders in the antibiotics field. FindingsThis paper shows how reshoring can address the problems of drug shortages and reduce availability risk in antibiotics' GVCs. However, the authors show that no simple and best solution exists because both alternatives of reshoring, i.e. backshoring and nearshoring, entail pros and cons for different stakeholders. The authors conclude with implications for policymakers and managers. Research limitations/implicationsThe analysis of pros and cons of both backshoring and nearshoring for various stakeholders offers relevant implications for research on operations and supply management, international business and economics/political science. Originality/valueThis paper looks at reshoring as a policy-driven decision and provides an innovative systemic perspective to analyse the implications for different stakeholders of two reshoring options concerning the antibiotics supply chain.
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This article presents a literature review and a bibliometric analysis of academic research on COVID-19 in strategy journals. The research topic is highly relevant considering the importance and the impact of the COVID-19 pandemic on companies' strategies worldwide and the fact that this pandemic has represented at the same time danger and opportunity for companies. The study comprises a review of 241 articles published in peer-reviewed journals from 2020 to the first quarter of 2022. Bibliometric and science mapping methods apply indicators identifying the most prominent journals, authors, countries, institutions, and topics. This approach allows a literature review highlighting the importance of five clusters on the COVID-19 impact on strategy journals: entrepreneurship, innovation, digital transformation, leadership, and resilience. They are strongly interrelated, and this study shows there are still many areas for further research within and outside these clusters. COVID-19 context offers perfect conditions to test theories and implement new research projects considering the high risk for other events of this type in the future.
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This study proposes the top gainer principle (TGP) and builds a calculation model based on the TGP to measure production carbon emissions transfer (PCET) in the context of global value chains. Compared with embodied carbon research, the innovative TGP model establishes a traceability mechanism based on the difference between responsibility and actual emissions from the perspective of the value chain, avoiding the endless debate between producer and consumer responsibility, which makes the TGP model more reasonable and fairer. In addition, using long-term input-output data, this study measures spatiotemporal patterns and the network evolution of global PCET. The results show that the total amount of global PCET has increased, and the regions with high outflows of PCET mainly include East Asia, North America, Central and Western Europe, and Russia. Among these regions, the United States and China accounted for the largest proportion of PCET outflow. By contrast, South America and Africa are typical low-outflow regions. From North America via central Europe, Turkey, Iran, South Asia to China, is a "W"-shaped high net outflow belt. The overall concentration of the global PCET network first decreased and then increased, and the network structure evolved into a bipolar network group with China and the United States as the core. Under the shock of the COVID-19 pandemic, the network structure showed a trend towards decentralization. This study suggests that efforts should be made to strengthen the responsibility of major countries, enhance the supervision of lead firms, establish a carbon emission transfer compensation system within value chains, and promote the development and spread of carbon emission reduction technologies to facilitate the reduction of global carbon emissions.
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Global value chains (GVCs) have increased efficiencies, accelerated production, reduced costs, and increased wealth and opportunities for workers, firms, nations, and the global economy as a whole. However, the benefits and efficiencies provided by these GVCs come at the cost of increasing risks. This is largely because the emergence and evolution of GVCs have been enabled by advancements in globalization, complexity, and technology, as well as the development of critical global systems that underpin these industries—such as communication, transportation, financial systems, and others. GVCs are thus only as stable as these underlying global systems upon which they depend, and are vulnerable to potential shocks to these systems.The COVID-19 pandemic and other recent global interruptions in GVCs have demonstrated the importance of applying a systems theory approach, which allows us to identify—and eventually begin managing for—the multidimensional risks that these global industries face. Studying the stability and reliability of these global industries requires not only an understanding of risks within just the GVCs but also an awareness of vulnerabilities in numerous critical underlying systems that form the infrastructure of GVCs and the global economy. As examples, we examine six such underlying systems: health care and public health, supply chain and logistics, technology and cyber, finance, sociopolitical, and the environment. Each of these examples illustrates that disruptions, fragilities, or failures in critical underlying systems can dramatically impact GVCs as a whole and make the geographic regions in which these systems are vulnerable less attractive to industry investment and expansion.Introducing methodologies and concepts from systems theory, we illustrate that these underlying global systems that expose GVCs to vulnerabilities are complex adaptive systems (CAS). As systems of systems composed of CAS, these GVCs consequently also can be modeled as CAS. We argue that not only does this CAS perspective help to mitigate the multilayered GVC risks through better understanding and the application of CAS tools like “adaptive management,” but it also empowers policymakers to better attract GVCs to their borders by prioritizing the creation of more resilient underlying systems.
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Almost everyone on the globe had to adjust to new conditions as a result of Covid-19 in conjunction with digitization. Contact and entry limitations damaged global business, trade and social connections. In addition, there is an increasing impact of digitization in supply chain. Regarding these disruptions current publications emphasize that global value chains are transforming to become more resilient. This study analyzes potential factors that might increase resilience in such a dynamic environment. The research is based on a quantitative empirical study to test the formulated hypotheses. The research questions were investigated trough a survey with logistics professionals. Two hypotheses were established as significant throughout the study. These are the robustness and responsiveness of global value chains, which have a substantial impact on their resilience. Both are determined direct or indirect by digital technologies. The complexity of global value chains had no discernible effect on the resilience of the system. A structural equation model is used to analyze the data's processing. This is achieved via a hypothesis model. As a result, major implications on global value chains' resilience can be found.
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Purpose The aim of this paper is to explore the changes in the ICT and global value chains (GVCs) after the COVID-19 pandemic. Design/methodology/approach This study compared the difference between Korea' domestic ICT industries, ICT imports and ICT exports before and after the COVID-19 outbreak by using trade data of ICT products and national economic indicators, and presents growth strategy for the ICT industry in the post-COVID 19 era. For this purpose, this study determined the causalities between Korea's imports/exports of ICT products and composite Indexes before and after COVID-19, and derived implications in the ICT industry environment after the COVID-19 pandemic. Findings Analysis results showed the following changes in Korea's ICT industry in the post-COVID-19 world. (1) Non-face-to-face and contact-free technologies related sectors in the ICT industry, such as the semiconductor sector, have grown exponentially;(2) as the USA has grown as the new key player, the causal relationship with China, a key player of the GVC in the pre-COVID-19 era, disappeared;and (3) the GVC of the ICT industry is not a rigid one-way vertical structure, but is changing to a flexible structure influenced by cooperation and competition between countries. Originality/value The results indicate that it is essential to constantly develop new ICT sectors that make use of non-face-to-face and contact-free technologies in the post-COVID-19 era, and the main strategies in response to the changed GVC would be taking the initiative by securing source technologies and expanding through cooperation with other GVCs and resource sharing.
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This paper provides new evidence on the reorganization of global production exploiting a novel dataset of Italian multinational firms surveyed throughout 2020 and 2021 as well as consolidated data sources. We find that Covid-19 did not spur large waves of reshoring nor plant closures. Even though the pandemic caused severe losses to firms, including multinationals, most did not stop foreign production nor are willing to do so in the near future. Trade policy uncertainty, conversely, is more likely to induce reshoring and plant closures. This evidence is consistent with a simple multi-period model, illustrating how offshoring, on the one side, and reshoring, on the other side, are asymmetric in important ways. In the presence of sunk costs, reshoring requires sufficiently large and permanent shocks to demand, trade and foreign production costs to induce behavioural changes. Covid-19 was a major shock, but it was mostly perceived as temporary, while persistent trade policy uncertainty, especially if combined with other shocks, is more likely to induce firms to revise their internationalization strategies.
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Over the last five decades, the Micro, Small, and Medium Enterprises (MSME) sector has evolved as a very lively and dynamic segment of the Indian economy. MSMEs not only serve a critical role in creating huge numbers of jobs at a cheaper cost of capital than major enterprises, but they also contribute to the industrialization of rural and backward areas, Thus, regional disparities will be reduced, and national income and wealth will be distributed more evenly. MSMEs serve as auxiliary units to larger enterprises, and this sector makes a significant contribution to the country’s socioeconomic growth. The pandemic of COVID-19 is the most important economic event in our generation. The pandemic that interrupted social and economic life has had an influence on nations and citizens alike, and it continues to do so. The Indian economy’s small and medium enterprise sector is a key and developing sector that contributes to job creation, economic growth, and innovation, as well as acting as the country’s socioeconomic backbone. MSMEs, who are the backbone of India’s inclusive economic storey, have been severely impacted by the coronavirus, which has disrupted their cash cycles. The situation of MSMEs is of great concern since they are such an essential element of both domestic and global value chains. The article will concentrate on the pandemic’s considerable impact on the performance of small and medium-sized businesses. The purpose of this article is to explore the relevance of the MSME sector in the growth of the Indian economy, as well as the impact of COVID-19 on MSMEs. It will also look into ways to revive MSMEs and what methods can be used to help these businesses get back on track with India’s economic progress. © 2022 by Nova Science Publishers, Inc.