Measuring Exposure to Risk in Global Value Chains

How exposed are countries and sectors to GVC risks? GVC participation matters for answering this question. Standard approaches either overstate the degree of backward integration or underestimate the involvement of some industries, especially services, in Global Value Chain (GVC) activity. To c...

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Main Authors: Borin, Alessandro, Mancini, Michele, Taglioni, Daria
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2021
Subjects:
Online Access:http://documents.worldbank.org/curated/undefined/476361632831927312/Countries-and-Sectors-in-Global-Value-Chains
http://hdl.handle.net/10986/36314
id okr-10986-36314
recordtype oai_dc
spelling okr-10986-363142022-09-06T21:30:08Z Measuring Exposure to Risk in Global Value Chains Borin, Alessandro Mancini, Michele Taglioni, Daria GLOBAL VALUE CHAIN TRADE INPUT-OUTPUT ANALYSIS INPUT-OUTPUT TABLE How exposed are countries and sectors to GVC risks? GVC participation matters for answering this question. Standard approaches either overstate the degree of backward integration or underestimate the involvement of some industries, especially services, in Global Value Chain (GVC) activity. To correct these biases, this paper proposes a novel comprehensive method to measure GVC participation using Inter-Country Input-Output (ICIO) linkages in both trade and output and shows that these improvements in methodology matter from a macroeconomic perspective. GVC integration, as measured by the indicators, decreases the exposure to domestic shocks and increases that to global shocks. The paper also finds that exposure to shocks is complex: in most countries and sectors, output is simultaneously exposed to supply and demand shocks. This two-sided exposure suggests that disruptions may not be easily managed by unilateral policy attempts at forcing a reorganization of buyers-seller relationships. 2021-09-30T12:58:55Z 2021-09-30T12:58:55Z 2021-09 Working Paper http://documents.worldbank.org/curated/undefined/476361632831927312/Countries-and-Sectors-in-Global-Value-Chains http://hdl.handle.net/10986/36314 English Policy Research Working Paper;No. 9785 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic GLOBAL VALUE CHAIN
TRADE
INPUT-OUTPUT ANALYSIS
INPUT-OUTPUT TABLE
spellingShingle GLOBAL VALUE CHAIN
TRADE
INPUT-OUTPUT ANALYSIS
INPUT-OUTPUT TABLE
Borin, Alessandro
Mancini, Michele
Taglioni, Daria
Measuring Exposure to Risk in Global Value Chains
relation Policy Research Working Paper;No. 9785
description How exposed are countries and sectors to GVC risks? GVC participation matters for answering this question. Standard approaches either overstate the degree of backward integration or underestimate the involvement of some industries, especially services, in Global Value Chain (GVC) activity. To correct these biases, this paper proposes a novel comprehensive method to measure GVC participation using Inter-Country Input-Output (ICIO) linkages in both trade and output and shows that these improvements in methodology matter from a macroeconomic perspective. GVC integration, as measured by the indicators, decreases the exposure to domestic shocks and increases that to global shocks. The paper also finds that exposure to shocks is complex: in most countries and sectors, output is simultaneously exposed to supply and demand shocks. This two-sided exposure suggests that disruptions may not be easily managed by unilateral policy attempts at forcing a reorganization of buyers-seller relationships.
format Working Paper
author Borin, Alessandro
Mancini, Michele
Taglioni, Daria
author_facet Borin, Alessandro
Mancini, Michele
Taglioni, Daria
author_sort Borin, Alessandro
title Measuring Exposure to Risk in Global Value Chains
title_short Measuring Exposure to Risk in Global Value Chains
title_full Measuring Exposure to Risk in Global Value Chains
title_fullStr Measuring Exposure to Risk in Global Value Chains
title_full_unstemmed Measuring Exposure to Risk in Global Value Chains
title_sort measuring exposure to risk in global value chains
publisher World Bank, Washington, DC
publishDate 2021
url http://documents.worldbank.org/curated/undefined/476361632831927312/Countries-and-Sectors-in-Global-Value-Chains
http://hdl.handle.net/10986/36314
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