Global Supply Chains and the Great Trade Collapse: Guilty or Casualty?
World Trade Organization (WTO); DEFI: Centre de recherche en developpement economique et finance internationale
April 4, 2011
Theoretical and Practical Research in Economic Fields, Vol. I, No. 1(1), pp. 27-41, Summer 2010
Trade and industrial production have been increasingly interlinked, thanks to the vertical integration of global manufacturing through outsourcing and off-shoring. The expansion of international supply chains apparently determined an increase in trade elasticity observed since the late 1980s, and may explain also the overshooting of trade elasticity during the 2008-2009 trade collapse. After reviewing the available evidences, the article analyses the future of globalized production networks in a post-crisis scenario. In the short term, global rebalancing might prove easier than expected. Supply chains may become smaller and more regional as a result of this rebalancing. This scenario creates a challenge for labour abundant less advanced developing countries in the periphery of the large regional networks.
Number of Pages in PDF File: 18
Keywords: global supply chains, trade, outsourcing, off-shoring, trade elasticity, internationalization of production
JEL Classification: F42, E32, F23, O24, O19, G01Accepted Paper Series
Date posted: April 7, 2011
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