Transformation of Global Value Chains in the Context of Modern Macroeconomic Shocks

Abstract

Purpose: The aim of this study is to examine the concept of global value chains (GVCs) in terms of the distribution of benefits among participating countries by deepening the international division of labor and including geographically distant and differently developed countries. Theoretical framework: The article emphasize that the involvement of countries in GVCs, along with benefits, has several risks associated with both endogenous and exogenous factors. Design/methodology/approach: The authors analyzed GVC studies and used such research methods as a case study and factor, comparative, and structural analysis. Russian and international statistical data were used as the study materials. Findings: The results of the analysis indicate that exogenous factors related to the COVID-19 pandemic and geopolitical tensions have led to the breakdown of GVCs and increased their instability. To address these issues, the authors suggest increasing the domestic value added in industries that rely heavily on foreign resources, reforming GVCs by localizing partnerships through deglobalization processes, and seeking out new trading partners. Research, Practical & Social implications: The study authors propose to make changes to the current structure of GVCs. This can help minimize negative consequences for the economy through the introduction of practices aimed at increasing the number of suppliers, expanding sales markets, and optimizing production processes. Originality/value: The value of the study lies in its identification of both the advantages and challenges of GVC participation for countries. It also offers practical solutions to enhance the resilience of GVCs, making the study results relevant for policymakers, businesses, and industries involved in GVCs.