Global Value Chains in the Era of the COVID-19 Pandemic: Symptoms of Deglobalization

Abstract

Purpose: The COVID-19 pandemic significantly affected the performance of global value chains (GVCs) due to lockdowns, restricted labor mobility, and consumers' access to retail markets. Authors verify the research hypothesis as follows: recent disruptions in GVCs will induce reshoring and permanent reconfiguration of economic activity whereas enhancing deglobalization. Design/Methodology/Approach: Authors conducted a critical analysis of economic papers registered in the Web of Science and Scopus databases and ratio analysis based on the World Bank's World Development Indicators and Reports. Findings: Authors argued that the reshoring of GVCs seems to lack solid, far-reaching economic premises, whereas policy recommendations in favor of enhancing GVCs' stability and resilience proved to be significant. Practical Implications: Authors provided a set of policy recommendations regarding enhancing the stability and resilience of GVCs when facing shocks such as the COVID-19 pandemic to minimize negative impacts related to reshoring and reconfiguring economic activity, e.g., discouraging productivity and competitiveness across regions, industries, and enterprises. Originality/Value: The paper discusses current and vital issues associated with implications of the COVID-19 pandemic for GVCs activities, providing valuable policy recommendations for mitigating deglobalization trends.