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

Richard Baldwin, Rebecca Freeman and Angelos Theodorakopoulos
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Richard Baldwin: IMD
Rebecca Freeman: Bank of England and CEP/LSE
Angelos Theodorakopoulos: Aston Business School and CBP/Aston

No 1159, Bank of England Staff Working Paper series from Bank of England

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.

Keywords: Regional value chains; global value chains; value chain disruptions; input reliance; shocks; foreign exposure. (search for similar items in EconPapers)
JEL-codes: D57 F13 F14 F15 F60 R15 (search for similar items in EconPapers)
Pages: 39
Date: 2025-11-28
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:023281

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