We still know little about how firms alter their global sourcing patterns when facing uncertainty and shocks. This column uses Japanese firm-level data compiled after the Great East Japan earthquake of 2011 to show that firms in affected areas reacted immediately by offshoring more, but that this affect was significant only in the manufacturing sector. Policies to facilitate offshoring would support such emergency responses in future.
Lianming Zhu, Koji Ito, Eiichi Tomiura, 28 January 2017
Bart Los, Marcel Timmer, Gaaitzen De Vries, 11 May 2014
Global value chains play an important role in many nations’ globalisation and development policies. Using a new indicator based on a global dataset – the World Input-Output Database – this column shows that international production networks have, since 2000, spread across regional blocs faster than they have spread within them. ‘Factory World’ is still a work in progress, but the construction is progressing rapidly
Pascal Lamy, 18 December 2013
The emergence of intra-firm trade as the primary component of international trade reflects a global interdependence in the production process. In this column the former Director-General of the WTO argues that this necessitates a re-examination of how we think about – and how we measure – trade between nations. Interdependence allows different sectors to add value, and complicates the implementation of trade barriers. Only with a modern perspective can effective trade policy be conducted.
Masahisa Fujita, 18 November 2013
A major feature of globalisation in the last decades has been the emergence of global supply chains, especially in Asia. This column explains how supply chains may increase the risks of shock contagion across countries. It shows how the earthquake and tsunami in Japan, and the floods in Thailand had ripple effects on the Japanese automobile industry across countries. It suggests that greater international cooperation, such as the development of sister industrial clusters, is one way to mitigate the risks.
Hubert Escaith, Robert Teh, Alexander Keck, Coleman Nee, 28 April 2011
The consequences of the tragic disaster in Japan are many. This column examines the trade effects. It suggests that Japanese exports will fall by 0.5–1.6% and its imports will rise by 0.4–1.3%. Despite the devastation in Japan, the effects on global trade will be relatively small.