COVID-19 Implications on Global Value Chains in Bulgaria and Romania

Iskra Balkanska

Global Economic Observer, 2021, vol. 9, issue 1, 39-47

Abstract: New structures formed because of the globalisation of the international economy. Global value chains (GVCs) represent a stage in the development of international production, trade, and investments. The countries of Central and Eastern Europe (CEE) are deeply involved in the European production and trade chains. This involvement stimulated the industrial base modernisation, the creation of new jobs, the expansion of export trade sectors, and foreign direct investment (FDI) attraction. Bulgaria and Romania are part of the European production model because of their inclusion in the European GVCs. Therefore, we have observed a positive effect on their export-oriented and investment policies. The pandemic COVID 19 crisis has a terribly negative effect on domestic and international economic development and growth. Because of the closure of the EU economies, the main European businesses squeezed their production, which reflected not only on the reduction of orders from major trade partners but also on the shrinking of domestic and foreign trade. These adverse effects affect the functioning of GVCs, which are likely to review their current activities and organisation of production. Under these challenging conditions, what will be the consequences for the Bulgarian and the Romanian economies?

Keywords: European Global value chains (GVCs); European industrial model; Bulgaria and Romania GVC linkages; COVID 19 and implications on economies (search for similar items in EconPapers)
JEL-codes: F12 F14 F23 (search for similar items in EconPapers)
Date: 2021-06
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