The more international trade expands, the more it becomes structured aro und Global Value Chains (GVCs). GVCs have changed the way firms design, produce and distribute their goods and services, although in recent years manufacturing firms have shortened the supply chains, by reducing the foreign added share in the value of final products. This has been done by shifting towards domestic, rather than international suppliers, so reversing the trend to outsource part of the productive process to foreign countries which started in the 1990's and continued in 2000's, in an attempt to obtain increased cost savings and higher efficiency. This phenomenon will probably be exacerbated by the recent spread of the COVID-19 virus, which will push companies to internalise some production phases that were previously outsourced abroad.
Thursday, July 04, 2024
