Post-Crisis Regionalisation of Global Value Chains in Strategies of Transnational Companies

The current global crisis led to the transformation of global value chains (GVC) in strategies of transnational companies (TNCs). The present study aims to establish a causal relationship between the volatility of the world economy and regionalisation of global value chains. Based on historical analysis and a systemic-functional approach, scattered information about the impact of global value chains on the development of TNC strategies was integrated. Thus, various aspects of TNC activities (their participation in international trade, international capital flows, etc.) were analysed together in order to identify the consequences of regionalisation for the strategic development of such companies. The study revealed that the established international production system carries many risks, which are exacerbated by continuing protectionism in international trade. Under the influence of digitalisation, regionalisation of value chains and partial reshoring of production facilities are the key directions for further development of GVCs. Given the rapid cross-border transmission of exogenous shocks, the stability and sustainability of global value chains will determine their development;however, there is no evidence whether GVCs will lengthen or shorten. The high cost of the complex reconfiguration of GVCs towards regionalisation will lead to only minor changes in their architecture. The redesign will affect only some aspects of activities, in particular, the organisation of work with global suppliers. While the weak integration of developing countries into GVCs will remain, the barriers to internationalisation will be reduced under the influence of digitalisation, creating new opportunities for the incorporation of small business into the international production system. In general, global value chains will still be considered a reliable source to reduce the risks of global operating activities of TNCs. The research results can be used for further theoretical and methodological development of internationalisation strategies. © 2022 Institute of Economics, Ural Branch of the Russian Academy of Sciences. All rights reserved.

Catalysing regional integration in Africa: The role of infrastructure

Now, more than ever, infrastructure integration in Africa has become critical to recalibrating Africa's growth strategy toward increased intraregional trade, especially in an era of global isolationism, protectionism and supply chain disruptions from COVID and the war in Ukraine. This paper investigates the extent to which infrastructure development and integration can act as a catalyst for trade, innovation and income improvements in Africa. Using panel data analysis, we show that the infrastructure sector with the strongest multiplier effect on economic activity is the information and communication technology (ICT) sector, followed by the transport sector, the electricity sector and, last, the water sector. This ranking of the catalytic role of infrastructure sectors should guide policy prioritisation on infrastructure investments to accelerate growth and unlock the potential of the AfCFTA. Benchmarking exercises on infrastructures' catalytic role in the regional economic communities (RECs) show that infrastructure has had the strongest impact on economic outcomes in the East African Community bloc, making the EAC a type of flying‐geese RECs for other regions to emulate.

Scarcity nationalism during COVID-19: Identifying the impact on trade costs.

During the COVID-19 pandemic, many countries used export and import policy as a tool to expand the availability of scarce critical medical products in the domestic market (scarcity nationalism). This paper assesses the direct and indirect (via trade in intermediates) increases in trade costs of critical medical goods resulting from these uncooperative policies. The results show that scarcity nationalism led to substantial increases in trade costs between February 2020 and December 2021 for most COVID-19 critical medical products, particularly garments (for example, face masks) and ventilators. The exception is vaccines, which saw a reduction in trade costs, which, however, was driven by the reduction in indirect trade costs for high-income countries, consistent with the view of a COVID-19 vaccine production club.

The changing contours of global value chains post-COVID: Evidence from the Commonwealth.

The COVID-19 pandemic emphasised the global value chains (GVCs) debate by focussing on whether gains from GVC participation outweigh firms associated risks of demand and supply shocks amid rising protectionism. This paper bridges the gap between the international trade and management literature by examining the impact of COVID-19 on Commonwealth countries, an area that has received scant attention in academic literature. Using the Eora database, we simulate scenarios to examine Commonwealth countries' participation in GVCs post-COVID. We draw on the transaction cost economics (TCE) theory to develop a framework that investigates whether growing protectionism, associated with reshoring, decoupling and nearshoring, could potentially affect the constellation and participation of Commonwealth countries in GVCs post-COVID. Results show that trade protectionism is likely to impact the supply chains and lead to GVC reconfiguration, which could offer opportunities for the Commonwealth countries and firms to potentially gain following the geographical redistribution of suppliers.