Economics Departmental Seminar - Professor Pierluigi Montalbano

Shocks and Reconfiguration in Global Value Chains: A Complex Network Perspective on the Global South

Co-authored with Roy Cerqueti, Silvia Nenci, and Saverio Storani

Abstract:

Abstract

The growing interconnectedness of supply linkages has amplified the transmission of external shocks through Global Value Chains (GVCs), most notably during the COVID-19 pandemic, raising concerns about the vulnerability of global production systems. However, existing evidence largely focuses on advanced economies, leaving limited systematic analysis of how disruptions reshape production networks in the Global South. This paper addresses this gap by examining how shocks between 2018 and 2022 reconfigured trade-in-value-added linkages in two labor-intensive sectors -Food & Beverages and Textiles & Wearing Apparel—that are central to export performance in many developing countries.

Using updated multi-region input–output data from the EORA database and a network-based analytical framework, we trace changes in countries’ structural positions within global production systems. The results show that GVCs remained broadly resilient at the aggregate level, but this resilience masked significant structural reorganization. Several previously dominant key nodes declined in centrality, while production networks became increasingly regionalized. While China and a few developing economies - including Bangladesh, India, and Indonesia - strengthened their roles as global suppliers, outcomes across countries were heterogeneous, reflecting differences in structural positions and integration within supply chains and pointing to pockets of vulnerability among selected Global South economies.

At a more granular level, the findings suggest that post-shock GVC reconfiguration among key Asian brokers (India and Vietnam) in labor-intensive manufacturing sectors has occurred primarily through selective regionalization, underscoring the growing strategic importance of regional trade integration for the resilience of Global South economies.

Bio:

Pierluigi Montalbano is Full Professor of International Economic Policy at Sapienza University of Rome and Associate Faculty at the University of Sussex. He previously held the Jean Monnet Chair on EU Trade Policy for Development and serves on the Consultative Committee for Impact Evaluation of the Italian Ministry of Foreign Affairs. He directs MSc programs in International Development and Cooperation Studies and Migration and Development and coordinates the PhD in Economics and Development at Sapienza. His research focuses on international economics and development, including global value chains, trade integration, instability in developing economies, culture and local development, and impact evaluation. He has extensive consulting experience with international institutions and governments.

Homepage: https://sites.google.com/uniroma1.it/pierluigimontalbano-eng/publications?authuser=0