Directorate for Science, Technology and Innovation
Global value chain dependencies under the magnifying glass
Policy makers are increasingly grappling with the stability implications of global
value chains (GVCs), as widespread supply shortages following the COVID-19 pandemic
and the Russian Federation’s large-scale aggression against Ukraine have disrupted
the economic recovery and contributed to high inflation. This paper provides a tool
to assess vulnerabilities in GVCs by drawing a detailed map of dependencies based
on new indicators constructed from the OECD Inter-Country Input-Output tables. The
key findings are as follows. First, GVC dependencies increase with both the size of
foreign exposures and the length of foreign value chains. Second, in some industries,
such as the automotive and ICT industries, vulnerabilities from high GVC dependence
are amplified by high geographic concentration of suppliers or buyers. Third, the
People’s Republic of China is the most critical choke point in GVCs across a broad
range of industries, both as a dominant supplier and as a dominant buyer.
Available from March 01, 2023
In series:OECD Science, Technology and Industry Policy Papersview more titles