ABSTRACT
The global value chain (GVC) literature has recognized the regional linkages of global production sharing while overlooking some regions across the globe. This gap may leave unanswered the question of how South American countries' regional trade linkages have changed amid the acceleration of globalization. This study, thus, investigates the regional linkages of global production sharing of South America by relying on value-added trade measures. Additionally, we develop a pioneering value-added hubness measure to illustrate the degree of relative market dependence between countries. The findings suggest that intra-regional forward linkages in South America have increased over time, but there are signs of a re-orientation towards Asia. China's influence extended beyond Asia, and together with the United States, China became an important hub-nation for South America. Brazil appears as a potential regional hub, mainly through its domestic market and not domestic production. Therefore, the study adds to GVC literature with insights about a missing region, reveals signs of changes in the interconnections between regional blocs, and enriches the research on the hub-and-spoke trade systems.
ABSTRACT
The COVID-19 crisis represents a turning point to rethink industrial policy spaces and countries' productive autonomy, especially for developing economies, such as Brazil, that call for new ways of thinking about manufacturing within societal purposes. Using an input-output model, the paper explores the pandemic-crisis-effects in the case of the Brazilian manufacturing sector. We find that the pandemic-crisis has harmful effects on the Brazilian productive structure, revealing the dependence on imports of the Brazilian Health System. Reductions in manufacturing gross output and value-added are mainly seen in knowledge-intensive subsectors, followed by job losses and tax revenue reduction. We suggest that the pandemic points to some roads to reindustrialization and resilience, given the reorganization of international production networks and the growing dependence on imports in key manufacturing sectors. Thus, the potential role of the manufacturing sector to achieve inclusive and sustainable growth reveals the importance of building productive capacity beyond the pandemic.