THE GLOBALIZATION CONUNDRUM POST COVID-19: INTERNALIZING THE RISKS OF THE SUPPLY CHAIN

Joseph Pelzman and Ofra Bazel-Shoham ()
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Ofra Bazel-Shoham: Department of Finance, Temple University, Broad Street, Philadelphia, PA, USA

Global Economy Journal (GEJ), 2021, vol. 21, issue 04, 1-16

Abstract: In 2020, US and European firms undertook financial risk that they can ill-afford to carry, stemming from their supply chain networks. Many have gradually deluded themselves into thinking their risk was reasonable, while other firms have made production sourcing decisions with little idea of the true magnitude of their risks. However, the rising risk was an inevitable consequence of the economy’s multinational firms, spreading the supply chain further away from their home base. For the purposes of this paper, we consider risk associated with a transaction to be excessive when the domestic multinational is likely to incur a loss that will seriously compromise its production and sales, and possibly force the firm into bankruptcy.

Keywords: COVID-19; supply chain disruptions; international trade; globalization (search for similar items in EconPapers)
JEL-codes: F02 F13 F61 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1142/S2194565922500075

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