1887

OECD Science, Technology and Industry Policy Papers

The OECD Directorate for Science, Technology and Innovation (STI) develops evidence-based policy advice on the contribution of science, technology and industry to well-being and economic growth. STI Policy Papers cover a broad range of topics, including industry and globalisation, innovation and entrepreneurship, scientific R&D and emerging technologies. These reports are officially declassified by an OECD Committee.

English

Global value chain dependencies under the magnifying glass

Policy makers are increasingly grappling with the stability implications of global value chains (GVCs), as widespread supply shortages following the COVID-19 pandemic and the Russian Federation’s large-scale aggression against Ukraine have disrupted the economic recovery and contributed to high inflation. This paper provides a tool to assess vulnerabilities in GVCs by drawing a detailed map of dependencies based on new indicators constructed from the OECD Inter-Country Input-Output tables. The key findings are as follows. First, GVC dependencies increase with both the size of foreign exposures and the length of foreign value chains. Second, in some industries, such as the automotive and ICT industries, vulnerabilities from high GVC dependence are amplified by high geographic concentration of suppliers or buyers. Third, the People’s Republic of China is the most critical choke point in GVCs across a broad range of industries, both as a dominant supplier and as a dominant buyer.

English

Keywords: global value chains, resilience, international trade
JEL: F14: International Economics / Trade / Empirical Studies of Trade; L52: Industrial Organization / Regulation and Industrial Policy / Industrial Policy; Sectoral Planning Methods; F68: International Economics / Economic Impacts of Globalization / Economic Impacts of Globalization: Policy
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