COVID-19 impact in sourcing in Global Value Chains

Abstract

This study explores the impact of COVID-19 on Global Value Chains (GVCs) using the Eurostat dataset, focusing on trade barriers and the difficulty of sourcing raw materials or intermediate goods from local and international suppliers. Using a contingency table grouped by country, we can see how raw material constraints and COVID-19’s GVCs affect many countries. The study uses Chi-square test to determine if these factors have a significant association. The data imply that foreign sourcing presents less challenges for suppliers than domestic sourcing, stressing the need of examining the consumer behaviour under uncertainties to develop GVCs resilience. The findings show a statistically significant link between barriers related to raw material and the effect level of COVID-19 in global value chains across all countries analysed. Suggesting that it is unlikely to have happened by random chance alone, highlighting the importance of addressing trade barriers and adapting to the impact of COVID-19 within global value chains.