Trade policies, firm strategies, and adaptive reconfigurations of global value chains
Journal of International Business Policy
; 4(4):506-522, 2021.
Article
in English
| ProQuest Central | ID: covidwho-1991746
ABSTRACT
The recent U.S.–China trade conflicts cast new light on the role of trade policies in global value chains (GVCs). Contrary to the expectation that trade restrictions lead to the shrinking or disruption of GVCs, our article posits that the unintended consequences of trade policies (both restrictions and trade agreements) are amplified by the prevalence and organizational complexity of GVCs. We anchor our argument in the historical evolution of three classic GVCs – apparel, automobiles, and electronics – from the 1970s to the present. Our framework highlights the dynamic interaction between GVC-oriented trade policies and firm strategies, which often has counterintuitive implications in terms of upgrading outcomes for the countries and companies involved in these GVCs. While trade policies often provide momentum for an adaptive reconfiguration of GVCs, firms’ strategic actions are crucial in modifying the geographic and organizational features of GVCs in ways that support their longevity. Firm strategies can mediate the effect of trade policies on GVC configurations in two ways (1) firms can accommodate trade restrictions and trade agreements by altering supply and demand locations and by switching supply-chain partners;and (2) firms pursue diverse strategies to upgrade their value chain activities, leveraging the shifting geographies associated with new trade rules.
Business And Economics--International Commerce; trade restrictions; trade war; firm strategies; global value chains; GVC configurations; unintended consequences; Textile industry; Trade agreements; Companies; Clothing industry; Trade policy; Supply & demand; Automobiles; Motor cars; Disruption; Value chain; Tariffs; Trade disputes; International trade; Sociology; Suppliers; COVID-19
Full text:
Available
Collection:
Databases of international organizations
Database:
ProQuest Central
Language:
English
Journal:
Journal of International Business Policy
Year:
2021
Document Type:
Article
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