The potential impacts of COVID-19 on the global value chains: GVC positioning and linkages

• Main Authors: FOONG, Gerald, CHANG, Pao-Li
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: COVID-19; global value chain (GVC); gross export decomposition; GVC position; upstream/downstream trade partners; International Economics; Public Health
• Online Access: https://ink.library.smu.edu.sg/soe_research/2411; https://ink.library.smu.edu.sg/context/soe_research/article/3410/viewcontent/covid19_gvc_.pdf
• Institution: Singapore Management University

Apart from the public health crisis entailed by the Coronavirus Disease 2019 (COVID-19) pandemic, it has also propagated a pandemic-induced economic shock globally. One transmission channel is via the inter-country linkages arising from the trade in intermediate inputs, which is a pertinent characteristic of global value chains (GVCs), and resulting in a "supply-chain contagion" as termed by Baldwin and Tomiura (2020). In this paper, we propose measures of bilteral downstreamness and upstreamness, the extent of a country's GVC participation, and the position of a country in GVCs by leveraging upon the gross export decomposition framework as laid out by Borin and Mancini (2019), which builds upon the work done by Koopman et al. (2014). By applying a regional lens to our analysis, we also identify key intermediary nodes that intermediate GVC-related ows within their region and across regions. Through this, we investigate the trade linkages of countries and discuss the potential impact of COVID-19 on GVCs.