46 research outputs found
Contagion effects in the world network of economic activities
Using the new data from the OECD-WTO world network of economic activities we
construct the Google matrix of this directed network and perform its
detailed analysis. The network contains 58 countries and 37 activity sectors
for years 1995, 2000, 2005, 2008, 2009. The construction of , based on
Markov chain transitions, treats all countries on equal democratic grounds
while the contribution of activity sectors is proportional to their exchange
monetary volume. The Google matrix analysis allows to obtain reliable ranking
of countries and activity sectors and to determine the sensitivity of
CheiRank-PageRank commercial balance of countries in respect to price
variations and labor cost in various countries. We demonstrate that the
developed approach takes into account multiplicity of network links with
economy interactions between countries and activity sectors thus being more
efficient compared to the usual export-import analysis. Our results highlight
the striking increase of the influence of German economic activity on other
countries during the period 1995 to 2009 while the influence of Eurozone
decreases during the same period. We compare our results with the similar
analysis of the world trade network from the UN COMTRADE database. We argue
that the knowledge of network structure allows to analyze the effects of
economic influence and contagion propagation over the world economy.Comment: this work is linked with arXiv:1504.06773 [q-fin.ST
The Hidden Cost of Supply Chain Disruptions: Case Study of the UK’s Automotive Sector
As the world economy has become increasingly integrated the spectre of transnational supply chains has become a central feature of globalisation. The smooth and unfettered working of transnational supply chains has facilitated efficiency increasing changes to business operations (such as just in time inventory management). The automotive sector worldwide has been at the forefront of internationally integrated supply systems. The European Union (EU) has, in part, been structured to reduce friction in Europe-wide supply chains through the single market. Transnational supply chains are at the heart of United Kingdom (UK) – EU trade, and the UK’s departure from the EU’s single market (Brexit) will increase friction in international trade. This case study of the UK’s automotive sector uses a social network approach to analyse supply chain linkages between the UK, EU and other trading partners, and how these could be impacted as a result of Brexit. We use data from Trade in Value Added (TiVA) and World Input-Output Database (WIOD) to map supply chains, estimate total value-added in exports and examine how Brexit is likely to impact the competitiveness of UK exports. Results confirm that the UK’s automotive sector is closely integrated with the EU. To offset the loss of UK’s export competitiveness after Brexit, trade facilitation measures complemented with a duty drawback scheme could be an option in the short run. Policy measures are, however, unlikely to replace the benefits of duty-free and frictionless access enjoyed under single market trading arrangements. This suggests that the UK automotive sector, which is primarily comprised of globally active firms, may have to reconfigure supply chain arrangements and in the long run alter how decisions pertaining to locations are made