IDEAS home Printed from https://ideas.repec.org/a/eee/eecrev/v187y2026ics0014292126000991.html

Inputs in distress: Geoeconomic fragmentation and firms’ sourcing

Author

Listed:
  • Panon, Ludovic
  • Lebastard, Laura
  • Mancini, Michele
  • Borin, Alessandro
  • Tofani, Peonare Caka
  • Cariola, Gianmarco
  • Essers, Dennis
  • Gentili, Elena
  • Linarello, Andrea
  • Padellini, Tullia
  • Requena, Francisco
  • Timini, Jacopo

Abstract

This paper studies the short-run economic impact of unanticipated disruptions to inputs potentially critical for domestic production and the green transition, and prone to geopolitical weaponisation (Foreign Critical Inputs - FCIs). Using firm-level customs and balance-sheet data for Belgium, France, Italy, Slovenia, and Spain, we find that a 50% reduction in FCI imports from China-aligned countries could lead to an average decline in manufacturing value added of 2.7% across the five countries. The impact, however, is highly uneven across firms, sectors, and regions. These findings highlight that supply disruptions in FCIs can impose substantial short-run economic costs.

Suggested Citation

  • Panon, Ludovic & Lebastard, Laura & Mancini, Michele & Borin, Alessandro & Tofani, Peonare Caka & Cariola, Gianmarco & Essers, Dennis & Gentili, Elena & Linarello, Andrea & Padellini, Tullia & Requena, 2026. "Inputs in distress: Geoeconomic fragmentation and firms’ sourcing," European Economic Review, Elsevier, vol. 187(C).
    • Handle: RePEc:eee:eecrev:v:187:y:2026:i:c:s0014292126000991
    DOI: 10.1016/j.euroecorev.2026.105355
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0014292126000991
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.euroecorev.2026.105355?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Francesco Paolo Conteduca & Simona Giglioli & Claire Giordano & Michele Mancini & Ludovic Panon, 2025. "Trade fragmentation unveiled: five facts on the reconfiguration of global, US and EU trade," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 52(3), pages 535-557, September.
    3. Giammetti, Raffaele & Wirkierman, Ariel L., 2025. "Global production scenarios: Actual unbundling, potential rebundling and geoeconomic rewiring across value chains," International Economics, Elsevier, vol. 183(C).
    4. Gianmarco Cariola, 2025. "Trade in the time of COVID-19: an empirical analysis based on Italian data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 161(4), pages 1463-1499, November.
    5. Gopinath, Gita & Gourinchas, Pierre-Olivier & Presbitero, Andrea F. & Topalova, Petia, 2025. "Changing global linkages: A new Cold War?," Journal of International Economics, Elsevier, vol. 153(C).
    6. Paolo Di Caro & Roberta Arbolino & Ugo Fratesi, 2026. "The costs of geopolitical risk and the impact of the EU cohesion policy," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 97(1), pages 159-182, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:187:y:2026:i:c:s0014292126000991. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eer .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.