Mapping and testing product-level vulnerabilities in granular production networks
This paper conducts an in-depth mapping of global value chain (GVC) vulnerabilities,
using granular product-level trade data to identify vulnerable products with limited
suppliers and substitutability. The study reveals that, in OECD countries, approximately
8% of foreign-sourced intermediate products are vulnerable, with about 50 products
identified as highly vulnerable, particularly in the pharmaceutical, mining, and manufacturing
sectors. The paper also introduces a quantitative framework for simulating supply
shock transmission from upstream suppliers to downstream industries over the short
and medium term. This framework leverages unique data that combine Inter-Country Input-Output
with detailed product-level trade data from Comtrade. Through simulation exercises,
the paper highlights the role of supplier concentration and geography in shock transmissions,
as well as the effectiveness of policies in mitigating these impacts. This novel cross-country
assessment of GVC disruptions provides new insights on how to manage supply chains
in a global economy subject to multiple risks.
Available from March 15, 2024
In series:OECD Science, Technology and Industry Working Papersview more titles