IDEAS home Printed from https://ideas.repec.org/a/pal/joibpo/v3y2020i3d10.1057_s42214-020-00062-w.html
   My bibliography  Save this article

What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies

Author

Listed:
  • Gary Gereffi

    (Duke University)

Abstract

The COVID-19 pandemic has caused a dramatic shortage in the medical supplies needed to treat the virus due to a massive surge in demand as the disease circled the globe during the first half of 2020. Prior to the crisis, there was an interdependence of trade and production for medical supplies, with advanced industrial countries like the United States and Germany specializing in the relatively high-tech medical devices sector, while low-cost production hubs such as China and Malaysia were leading producers of less technologically sophisticated personal protective equipment (PPE) products such as face masks, surgical gloves, and medical gowns. After the COVID-19 outbreak, global shortages of PPE products emerged as many affected countries imposed export controls and sought ways to boost domestic output. A case study of the face mask value chain in the United States shows misalignments between the priorities of U.S. federal government officials and the strategies of leading U.S. multinational producers of face masks, which resulted in exceptionally costly policy delays in terms of health outcomes. On balance, the U.S. shortage of N95 respirators during the COVID-19 pandemic is more a policy failure than a market failure. The global value chain framework highlights strategic options that could lead to more resilient supply chains and diversified sourcing patterns.

Suggested Citation

  • Gary Gereffi, 2020. "What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 287-301, September.
  • Handle: RePEc:pal:joibpo:v:3:y:2020:i:3:d:10.1057_s42214-020-00062-w
    DOI: 10.1057/s42214-020-00062-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s42214-020-00062-w
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1057/s42214-020-00062-w?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Daria Taglioni & Deborah Winkler, 2016. "Making Global Value Chains Work for Development," World Bank Publications, The World Bank, number 24426, December.
    2. Robert H. Wade, 2018. "The Developmental State: Dead or Alive?," Development and Change, International Institute of Social Studies, vol. 49(2), pages 518-546, March.
    3. Liena Kano & Eric W. K. Tsang & Henry Wai-chung Yeung, 2020. "Global value chains: A review of the multi-disciplinary literature," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 577-622, June.
    4. Coe, Neil M. & Yeung, Henry Wai-chung, 2015. "Global Production Networks: Theorizing Economic Development in an Interconnected World," OUP Catalogue, Oxford University Press, number 9780198703914.
    5. Kaplinsky, Raphael & Terheggen, Anne & Tijaja, Julia, 2011. "China as a Final Market: The Gabon Timber and Thai Cassava Value Chains," World Development, Elsevier, vol. 39(7), pages 1177-1190, July.
    6. Gary Gereffi & Stacey Frederick & Penny Bamber, . "Diverse paths of upgrading in high-tech manufacturing: Costa Rica in the electronics and medical devices global value chains," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    7. Olivier Cattaneo & Gary Gereffi & Cornelia Staritz, 2010. "Global Value Chains in a Postcrisis World : A Development Perspective," World Bank Publications, The World Bank, number 2509, December.
    8. Patrick Low & Gloria O Pasadilla (ed.), 2016. "Services in Global Value Chains:Manufacturing-Related Services," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 10073, July.
    9. Wade, Robert H., 2018. "The developmental state: dead or alive?," LSE Research Online Documents on Economics 87356, London School of Economics and Political Science, LSE Library.
    10. McWilliam, Sarah E. & Kim, Jung Kwan & Mudambi, Ram & Nielsen, Bo Bernhard, 2020. "Global value chain governance: Intersections with international business," Journal of World Business, Elsevier, vol. 55(4).
    11. Gary Gereffi, 2019. "Global value chains and international development policy: Bringing firms, networks and policy-engaged scholarship back in," Journal of International Business Policy, Palgrave Macmillan, vol. 2(3), pages 195-210, September.
    12. Ram Mudambi, 2008. "Location, control and innovation in knowledge-intensive industries," Journal of Economic Geography, Oxford University Press, vol. 8(5), pages 699-725, September.
    13. Timothy Sturgeon & Johannes Van Biesebroeck & Gary Gereffi, 2008. "Value chains, networks and clusters: reframing the global automotive industry," Journal of Economic Geography, Oxford University Press, vol. 8(3), pages 297-321, May.
    14. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Trade and Globalization
    2. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Economic consequences > Production and supply

    Citations

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


    Cited by:

    1. Dallas, Mark P. & Horner, Rory & Li, Lantian, 2021. "The mutual constraints of states and global value chains during COVID-19: The case of personal protective equipment," World Development, Elsevier, vol. 139(C).
    2. Evenett,Simon J. & Hoekman,Bernard M. & Rocha,Nadia & Ruta,Michele, 2021. "The Covid-19 Vaccine Production Club : Will Value Chains Temper Nationalism?," Policy Research Working Paper Series 9565, The World Bank.
    3. Inferrera, Sergio, 2021. "Globalisation in Europe: Consequences for the business environment and future patterns in light of Covid-19," IWH-CompNet Discussion Papers 2/2021, Halle Institute for Economic Research (IWH).
    4. El Baz, Jamal & Ruel, Salomée, 2021. "Can supply chain risk management practices mitigate the disruption impacts on supply chains’ resilience and robustness? Evidence from an empirical survey in a COVID-19 outbreak era," International Journal of Production Economics, Elsevier, vol. 233(C).
    5. Christopher Findlay & Bernard Hoekman, 2020. "Value Chain Approaches to Reducing Policy Spillovers on International Business," RSCAS Working Papers 2020/, European University Institute.
    6. Gergo Toth & Zoltan Elekes & Adam Whittle & Changjun Lee & Dieter F. Kogler, 2020. "Technology network structure conditions the economic resilience of regions," Papers in Evolutionary Economic Geography (PEEG) 2048, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2020.
    7. Bernard Hoekman & Anirudh Shingal & Varun Eknath and Viktoriya Ereshchenko, 2020. "COVID-19, public procurement regimes and trade policy," RSCAS Working Papers 2020/72, European University Institute.
    8. Niraja Srinivasan & Lorraine Eden, 2021. "Going digital multinationals: Navigating economic and social imperatives in a post-pandemic world," Journal of International Business Policy, Palgrave Macmillan, vol. 4(2), pages 228-243, June.
    9. Andzelika Kuznar & Jerzy Menkes, 2020. "The UE-Vietnam Free Trade and Investment Protection Agreements: Legal and Economic Perspectives," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 215-233.
    10. Jill Juergensen & José Guimón & Rajneesh Narula, 0. "European SMEs amidst the COVID-19 crisis: assessing impact and policy responses," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 0, pages 1-12.
    11. Fernando Merino & Cristina Di Stefano & Luciano Fratocchi, 2021. "Back-shoring vs near-shoring: a comparative exploratory study in the footwear industry," Operations Management Research, Springer, vol. 14(1), pages 17-37, June.
    12. -, 2020. "Foreign Direct Investment in Latin America and the Caribbean 2020," La Inversión Extranjera Directa en América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 46541 edited by Eclac.
    13. Jan Grumiller & Hannes Grohs & Christian Reiner, 2021. "“Increasing the resilience and security of supply ofproduction post-COVID-19” - The Case of Medical and Pharmaceutical Products," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 216, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    14. Axèle Giroud & Inge Ivarsson, 2020. "World Investment Report 2020: International production beyond the pandemic," Journal of International Business Policy, Palgrave Macmillan, vol. 3(4), pages 465-468, December.
    15. Artecona, Raquel & Jorge, María Fabiana, 2021. "United States supply chains resiliency: The key role Latin America and the Caribbean could play," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 46875, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    16. Werner G. Raza & Jan. Grumiller & Hannes. Grohs & Verena Madner & Stefan. Mayr & Iryna Sauca, 2021. "Assessing the opportunities and limits of a regionalization of economic activity," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 215, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    17. Simon J. Evenett, 2020. "Chinese whispers: COVID-19, global supply chains in essential goods, and public policy," Journal of International Business Policy, Palgrave Macmillan, vol. 3(4), pages 408-429, December.
    18. Ari Van Assche, 2021. "Shortages in essential goods: Are global value chains part of the problem or the solution?," SPP Communique, The School of Public Policy, University of Calgary, vol. 14(17), May.
    19. Jill Juergensen & José Guimón & Rajneesh Narula, 2020. "European SMEs amidst the COVID-19 crisis: assessing impact and policy responses," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(3), pages 499-510, September.
    20. Sébastien Miroudot, 2020. "Reshaping the policy debate on the implications of COVID-19 for global supply chains," Journal of International Business Policy, Palgrave Macmillan, vol. 3(4), pages 430-442, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gary Gereffi, 0. "What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies," Journal of International Business Policy, Palgrave Macmillan, vol. 0, pages 1-15.
    2. McWilliam, Sarah E. & Kim, Jung Kwan & Mudambi, Ram & Nielsen, Bo Bernhard, 2020. "Global value chain governance: Intersections with international business," Journal of World Business, Elsevier, vol. 55(4).
    3. Liena Kano & Eric W. K. Tsang & Henry Wai-chung Yeung, 2020. "Global value chains: A review of the multi-disciplinary literature," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 577-622, June.
    4. Gary Gereffi, 2019. "Global value chains and international development policy: Bringing firms, networks and policy-engaged scholarship back in," Journal of International Business Policy, Palgrave Macmillan, vol. 2(3), pages 195-210, September.
    5. Valentina De Marchi & Elisa Giuliani & Roberta Rabellotti, 2018. "Do Global Value Chains Offer Developing Countries Learning and Innovation Opportunities?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 389-407, July.
    6. Padmashree Gehl Sampath & Bertha Vallejo, 2018. "Trade, Global Value Chains and Upgrading: What, When and How?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 481-504, July.
    7. Antonello Zanfei & Andrea Coveri & Mario Pianta, 2019. "FDI Patterns and Global Value Chains in the Digital Economy," Working Papers 1903, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2019.
    8. Emanuela Todeva & Ruslan Rakhmatullin, 2016. "Industry Global Value Chains, Connectivity and Regional Smart Specialisation in Europe. An Overview of Theoretical Approaches and Mapping Methodologies," JRC Working Papers JRC102801, Joint Research Centre (Seville site).
    9. Stefan Pahl & Marcel P. Timmer, 2020. "Do Global Value Chains Enhance Economic Upgrading? A Long View," Journal of Development Studies, Taylor & Francis Journals, vol. 56(9), pages 1683-1705, July.
    10. Gary Gereffi & Joonkoo Lee, 2016. "Economic and Social Upgrading in Global Value Chains and Industrial Clusters: Why Governance Matters," Journal of Business Ethics, Springer, vol. 133(1), pages 25-38, January.
    11. Xiaofei Chen & Enru Wang & Changhong Miao & Lili Ji & Shaoqi Pan, 2020. "Industrial Clusters as Drivers of Sustainable Regional Economic Development? An Analysis of an Automotive Cluster from the Perspective of Firms’ Role," Sustainability, MDPI, Open Access Journal, vol. 12(7), pages 1-22, April.
    12. Lema, Rasmus, 2010. "Adoption of Open Business Models in the West and Innovation in India's Software Industry," MPRA Paper 49589, University Library of Munich, Germany.
    13. Marcel P Timmer & Sébastien Miroudot & Gaaitzen J de Vries, 2019. "Functional specialisation in trade," Journal of Economic Geography, Oxford University Press, vol. 19(1), pages 1-30.
    14. Liena Kano, 2018. "Global value chain governance: A relational perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(6), pages 684-705, August.
    15. Bart Los & Marcel P. Timmer & Gaaitzen J. Vries, 2015. "How Global Are Global Value Chains? A New Approach To Measure International Fragmentation," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 66-92, January.
    16. Niraja Srinivasan & Lorraine Eden, 2021. "Going digital multinationals: Navigating economic and social imperatives in a post-pandemic world," Journal of International Business Policy, Palgrave Macmillan, vol. 4(2), pages 228-243, June.
    17. Rasmus Lema & Roberta Rabellotti & Padmashree Gehl Sampath, 2018. "Innovation Trajectories in Developing Countries: Co-evolution of Global Value Chains and Innovation Systems," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 345-363, July.
    18. Armando Rungi & Davide Del Prete, 2017. "The 'Smile Curve': where Value is Added along Supply Chains," Working Papers 05/2017, IMT School for Advanced Studies Lucca, revised Mar 2017.
    19. Christopher Findlay & Bernard Hoekman, 2020. "Value Chain Approaches to Reducing Policy Spillovers on International Business," RSCAS Working Papers 2020/, European University Institute.
    20. Pipkin, Seth & Fuentes, Alberto, 2017. "Spurred to Upgrade: A Review of Triggers and Consequences of Industrial Upgrading in the Global Value Chain Literature," World Development, Elsevier, vol. 98(C), pages 536-554.

    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:pal:joibpo:v:3:y:2020:i:3:d:10.1057_s42214-020-00062-w. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.palgrave.com .

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.