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Assessing risk: a toolkit for measuring regional supply-chain exposure to global shocks

Author

Listed:
  • Richard Baldwin

    (IMD)

  • Rebecca Freeman

    (Bank of England and CEP/LSE)

  • Angelos Theodorakopoulos

    (Aston Business School and CBP/Aston)

Abstract

This paper develops a new toolkit for analysing how global shocks affect the geographical and functional distribution of global value chains (GVCs) at the subnational level. Using the toolkit, which we call the shocks approach to indicator design, we derive a family of GVC indicators that distinguish between import and export‑side GVC exposure, direct (face‑value) and indirect (hidden exposure) linkages, and gross versus value‑added GVC trade flows. Applying the indicators to multi‑regional multi‑country input‑output data and analysing EU‑UK and EU‑China trade, we show that inferences about regional vulnerability depend critically on the type of exposure measured. The results highlight how global disruptions propagate unevenly across regions and provide a foundation for place‑based policies that strengthen resilience through targeted diversification and smarter supply‑chain monitoring.

Suggested Citation

  • Richard Baldwin & Rebecca Freeman & Angelos Theodorakopoulos, 2025. "Assessing risk: a toolkit for measuring regional supply-chain exposure to global shocks," Bank of England Staff Working Paper series 1159, Bank of England.
    • Handle: RePEc:boe:boeewp:023281
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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2025/assessing-risk-a-toolkit-for-measuring-regional-supply-chain-exposure-to-global-shocks.pdf
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    Keywords

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    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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