scholarly journals Disruptions in global value chains due to COVID-19: stylized facts and policy lessons

2021 ◽  
Vol 58 (1&2) ◽  
pp. 214-240
Author(s):  
Adrian Mendoza
Keyword(s):  
Global Value Chains ◽  
Value Chains ◽  
Disruptive Effect ◽  
Input Output ◽  
Early Assessment ◽  
Stylized Facts ◽  
Economic Sectors ◽  
Output Analysis ◽  
Supply Shock ◽  
Containment Measures

This paper provides an early assessment of global value chains (GVCs) amid the disruptive effects of COVID-19 on world trade. Using the Asian Development Bank’s updated Multiregional Input-Output Table, key indicators were estimated to identify important stylized facts about the contraction of GVC activities in 2020. Econometric models were also estimated to analyze the disruptive effect of COVID-19 outbreaks and stringent containment measures on GVC trade. The input-output analysis confirms that all major economic sectors suffered large losses, especially services. However, the bulk of the decline in overall GVC trade can still be traced to lower backward transactions in manufacturing. On the aggregate level, stronger backward GVC participation was associated with relatively milder contraction while the opposite was observed for forward participation. The regressions showed that positive growth of GVC trade was less likely in sectors with relatively larger exposure to foreign downstream shocks. Further, the combined effects of stringent containment measures and severe COVID-19 outbreaks also reduced the probability of growth in both backward and forward GVC transactions. These findings indicate that on top of foreign suppliers’ internal disruptions (foreign supply shock), weak global consumption (foreign demand shock) and local producers’ domestic sourcing problems (local supply shock) contributed to the steep contraction of GVCs in 2020. Against this background, the major challenges to robust recovery were also identified. These include the downside risks of a prolonged pandemic, the resurgence of protectionist tendencies, the strength of global demand, the reconfiguration of broken supply chains, and the ability of countries to coordinate their actions especially with respect to vaccination.

scholarly journals Impact Study on Social Accounting Matrix by Intrabusiness Analysis

2021 ◽  
Vol 18 (23) ◽  
pp. 12547
Author(s):  
Monica Laura Zlati ◽  
Romeo-Victor Ionescu ◽  
Valentin Marian Antohi
Keyword(s):  
Economic Systems ◽  
Input Output ◽  
Economic Sectors ◽  
Output Analysis ◽  
Regional Economic ◽  
New Approach ◽  
The Matrix ◽  
The Government ◽  
Current Concerns

According to the current concerns about social welfare and environmental protection, integrated in a model assimilated to intrabusiness relations, our research started from the analysis of the initial model SAM, which will be transformed in order to develop the SAMI model under six research objectives. The need of improving SAM matrix started to connect it directly to the regional economic systems and continued to a new approach on Input-Output Analysis. Nowadays, SAM describes the intraregional connections between regional economic actors using the role of different income categories. Moreover, SAM can quantify different regional multipliers. All deficiencies previously identified in connection to SAM model have been reviewed and resolved within the proposed SAMI model by the authors of this paper. The purpose of this research is the launch of an absolutely new mathematical model (SAMI) and its practical testing at regional level. This model is able to systematize the links between the local and regional businesses, under the matrix (SAMI) flow, for all kinds of companies and to assist the regional decision, as well. Czamanski was not able to escape from the input-output prison’s approach. This is why he continued to use the linear interdependencies between the industries, economic sectors and economic actors. The income is able only to approximate the individuals and other economic actors’ welfare. If the increase in the average and aggregate income is doubled by an unfair distribution of income in two countries which have the same average income, the effects on welfare vary a lot. A relatively similar effect comes from the government policy differences in income distribution and redistribution.

scholarly journals The similarity of global value chains: A network-based measure

2018 ◽  
Vol 6 (4) ◽  
pp. 607-632 ◽  
Author(s):  
ZHEN ZHU ◽  
GREG MORRISON ◽  
MICHELANGELO PULIGA ◽  
ALESSANDRO CHESSA ◽  
MASSIMO RICCABONI
Keyword(s):  
Global Value Chains ◽  
Value Chains ◽  
Input Output ◽  
The World ◽  
Average Similarity ◽  
Node Similarity ◽  
Node Attributes ◽  
Measure Of Similarity ◽  
Increasing Trends ◽  
Over Time

AbstractInternational trade has been increasingly organized in the form of global value chains (GVCs). In this paper, we provide a new method for comparing GVCs across countries and over time. First, we use the World Input–Output Database (WIOD) to construct both the upstream and the downstream global value networks. Second, we introduce a network-based measure of node similarity to compare the GVCs between any pair of countries for each sector and each year available in the WIOD. Our network-based similarity is a better measure for node comparison than the existing ones because it takes into account all the direct and indirect relationships between the country–sector pairs, is applicable to both directed and weighted networks with self-loops, and takes into account externally defined node attributes. As a result, our measure of similarity reveals the most intensive interactions among the GVCs across countries and over time. From 1995 to 2011, the average similarity between sectors and countries have clear increasing trends, which are temporarily interrupted by the recent economic crisis. This measure of the similarity of GVCs provides quantitative answers to important questions about dependency, sustainability, risk, and competition in the global production system.

scholarly journals Digital-related economy sectors and regional economy disruption

2019 ◽  
Vol 22 (1) ◽  
pp. 147-162
Author(s):  
Achmad Nurdany ◽  
Anggari Marya Kresnowati
Keyword(s):  
Economic Impact ◽  
Regional Economy ◽  
Manufacturing Sector ◽  
Digital Economy ◽  
Input Output ◽  
Economic Sectors ◽  
Output Analysis ◽  
Goods And Services ◽  
Multiplier Effect ◽  
The Government

While the study of the regional economy and its factors has been well-researched, relatively less is known on the issues for the digital economy sectors affecting the regional economy. Therefore, the aims of this paper are: to investigate the regional economic impact caused by digital economy sectors; to analyze the multiplier effect of these sectors on the output, income, and employment; and to calculate the economic impact of additional investment in the digital economy sectors. The study focuses on the region of East Java Province, Indonesia. The method used in this study is the input-output analysis (13 x 13 aggregation), which generates transaction of goods and services at a certain time. This study uses data from the Central Bureau of Statistics, Input-Output Table of East Java Province year 2015, which  includes 110 economic sectors, which are then grouped into digital related and non-digital related sectors. The result indicates that digital economy sectors have both backward and forward linkages to other sectors in the region. Further finding shows that digital related manufacturing sector has the highest multiplier effect on the output, income, and employment. While investment injection on the digital economy sectors, based on the analysis, will make better disruption on East Java economy. The government of the region should put an emphasis to attract more investment in the digital economy sectors.

scholarly journals Multi-Scale Assessment of the Economic Impacts of Flooding: Evidence from Firm to Macro-Level Analysis in the Chinese Manufacturing Sector

2019 ◽  
Vol 11 (7) ◽  
pp. 1933 ◽  
Author(s):  
Xi Hu ◽  
Raghav Pant ◽  
Jim W Hall ◽  
Swenja Surminski ◽  
Jiashun Huang
Keyword(s):  
Manufacturing Sector ◽  
Economic Impacts ◽  
Macro Level ◽  
Total Output ◽  
Input Output ◽  
Economic Sectors ◽  
Output Analysis ◽  
Firm Level ◽  
Flood Impacts ◽  
Macroeconomic Impact

We present an empirical study to systemically estimate flooding impacts, linking across scales from individual firms through to the macro levels in China. To this end, we combine a detailed firm-level econometric analysis of 399,356 firms with a macroeconomic input-output model to estimate flood impacts on China’s manufacturing sector over the period 2003–2010. We find that large flooding events on average reduce firm outputs (measured by labor productivity) by about 28.3% per year. Using an input-output analysis, we estimate the potential macroeconomic impact to be a 12.3% annual loss in total output, which amounts to 15,416 RMB billion. Impacts can propagate from manufacturing firms, which are the focus of our empirical analysis, through to other economic sectors that may not actually be located in floodplains but can still be affected by economic disruptions. Lagged flood effects over the following two years are estimated to be a further 5.4% at the firm level and their associated potential effects are at a 2.3% loss in total output or 2,486 RMB billion at the macro-level. These results indicate that the scale of economic impacts from flooding is much larger than microanalyses of direct damage indicate, thus justifying greater action, at a policy level and by individual firms, to manage flood risk.

scholarly journals Measuring Global Value Chains

2018 ◽  
Vol 10 (1) ◽  
pp. 207-236 ◽  
Author(s):  
Robert C. Johnson
Keyword(s):  
Multinational Firms ◽  
Bilateral Trade ◽  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Production Networks ◽  
Input Output ◽  
Firm Level ◽  
Level Data ◽  
Production Stages

Recent decades have seen the emergence of global value chains (GVCs), in which production stages for individual goods are broken apart and scattered across countries. Stimulated by these developments, there has been rapid progress in data and methods for measuring GVC linkages. The macro approach to measuring GVCs connects national input–output tables across borders by using bilateral trade data to construct global input–output tables. These tables have been applied to measure trade in value added, the length of and location of producers in GVCs, and price linkages across countries. The micro approach uses firm-level data to document firms’ input sourcing decisions, how import and export participation are linked, and how multinational firms organize their production networks. In this review, I evaluate progress in these two approaches, highlighting points of contact between them and areas that demand further work. I argue that further convergence between these approaches can strengthen both, yielding a more complete empirical portrait of GVCs.

The Economic Role of Water in FYR Macedonia: An Input–Output Analysis and Implications for the Western Balkan Countries

2016 ◽  
Vol 02 (04) ◽  
pp. 1650025 ◽  
Author(s):  
Jordan Hristov ◽  
Aleksandra Martinovska-Stojcheska ◽  
Yves Surry
Keyword(s):  
Water Resources ◽  
Water Consumption ◽  
Natural Water ◽  
Input Output ◽  
Economic Sectors ◽  
Output Analysis ◽  
Pricing Policy ◽  
Electrical Machinery ◽  
Agriculture Sector

Sustainable management of water resources is imperative in the Western Balkan (WB) region, due to the seasonal, spatial and quality distribution of these resources. This paper analyzed water consumption and associated relationships between the economic sectors in Macedonia in 2005, based on input–output (IO) analysis. Using an environmentally extended IO framework, water consumption was investigated by developing several indicators. Disaggregation of the agriculture sector into 11 sub-sectors, combined with backward and forward linkage analysis, allowed us to identify rice, fruits, grapes and wine, other crop and cattle production as key water-consuming sub-sectors. The developed indicators revealed a high proportion of direct water consumption in agriculture and some other non-agricultural sectors such as mining and quarrying, other mining and quarrying products, food products and beverages as well as electrical machinery, which imposed significant pressure on natural water resources in Macedonia. Therefore, changes in production technology and specializations in Macedonia toward less water-intensive options are needed to ease the pressure on natural water resources. Extending the existing water pricing policy to capture economic, social and environmental aspects should also be considered. Moreover, the development and construction of water accounts and the disaggregation procedure have valuable implications for the WB countries. Applications elsewhere following this Macedonian example can provide a meaningful understanding of the role of water and interdependencies at regional level and increase awareness of the water resource availability at trans-boundary scale.

scholarly journals Spatial Distribution of Multipliers in Kalimantan Island Economy: An Inter-Regional Input-Output Analysis

2017 ◽  
Vol 6 (2) ◽  
pp. 217-230
Author(s):  
Muchdie Muchdie
Keyword(s):  
Spatial Distribution ◽  
Regional Development ◽  
Input Output ◽  
Hybrid Procedures ◽  
Economic Sectors ◽  
Output Analysis ◽  
Input Output Analysis ◽  
Distribution Of Flow

This paper provides the results of analysis on total multipliers and flow-on, sectoral-specific, and spatial-specific multipliers as important indicators for evaluating, planning and controlling regional development in Kalimantan Island economy. The model employed was Inter-Island Input-Output Model developed using new hybrid procedures with special attention on Island economy. The results show that firstly, the important sectors of Kalimantan Island economy could be based on total multipliers and flow-on effects of output, income and employment. Secondly, important economic sectors could be based on sector-specific multipliers effects; multipliers that occurred in own sector and other sectors. Thirdly, important economic sectors could be based on spatial-specific multipliers; multipliers that occurred both in own region and other regions. Finally, important economic sectors could be based on spatial distribution of flow-on; flow-on effects that occurred in own region as well as in other regions.DOI: 10.15408/sjie.v6i2.4736

scholarly journals The Role of Mexico in Global Value Chains: Prospects and Obstacles

2020 ◽  
pp. 85-101
Author(s):  
Mariya V. Makarova
Keyword(s):  
Industrial Development ◽  
Global Value Chains ◽  
Value Chains ◽  
Economic Sectors ◽  
Northern Border ◽  
International Trading ◽  
Trading Activities ◽  
Key Aspects ◽  
The Impact

The article describes the impact of global value chains on the economic development of countries. Trade liberalization has made Mexico one of the leading countries in the world with a production economy and an attractive market for FDI. Nevertheless, Mexico has difficulties due to the uneven development of economic sectors, the low level of R & D expenditures, the lack of sufficient coordination in the preparation and application of skilled labor, and the level of remuneration. The key aspects of Mexico’s current export orientation and its strong link to regional international supply chains are industrial development and job creation programs on the northern border of the country, the so-called maquiladoras industry. The close integration of the dynamically developing sectors of the Mexican economy into the global value chains of North America made it difficult to increase domestic exports. Mexican companies integrated into these chains, as a rule, are highly dependent on imported resources, which limits their contribution to the development of a dynamic and properly structured domestic industry. The article analyzes the main economic indicators of Mexico, which determine the country's involvement in global value chains, and identify the strengths and weaknesses of the country to further expand its international trading activities.

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