Gideon Ndubuisi

Sustainable Global Supply Chains Report 2022

Global supply chains affect the economy, the environment and social welfare in many ways. Worldwide, economies are experiencing global supply shortages today, affecting key industries such as automotive and consumer electronics as well as vaccine and medical supplies industries. These preoccupy policymakers, who are debating independent national production capacities and restrictions on international trade, but also large companies, which consider reshoring production and abandoning just-in-time procurement. At the same time, the greening of the global economy requires a restructuring of global production to massively decrease its environmental footprint. This creates new supply chain challenges – how to move towards circular economies and how to reorient energy-intensive industries towards renewables and green hydrogen, for example. And let‘s not forget: Consumers are increasingly demanding higher social and environmental standards. Transparency requirements and binding due diligence obligations will in particular affect countries that export raw materials and labour-intensive goods produced under problematic environmental and social conditions. All of this calls for policies that shape global supply chains in accordance with globally agreed social and environmental objectives. Policies along these lines will have to balance the legitimate interests of different countries and they may easily fail to achieve their objectives unless they are firmly grounded in a thorough understanding of the respective structures in supply chains, including the power relations between the actors. Further, the economic, social and environmental effects of alternative policy options need to be well understood. Science can make an important contribution here, especially if it maintains a constant dialogue with politics and society. This is why the international “Research Network Sustainable Global Supply Chains” was initiated by the Federal Ministry for Economic Cooperation and Development (BMZ). It currently comprises about 100 internationally leading scientists from all over the world and is jointly coordinated by our four institutes. Its tasks are: To conduct and stimulate research that contributes to making supply chains more sustainable; and to collect and synthesize the best international research on this topic and make it accessible to policy makers and other societal actors. In addition to its own research, the network organises academic conferences and discussions with policymakers, organises a blog and produces podcasts. With this report – the first in a new annual series – we present new research highlights, provide a forum to debate controversial supply chain topics and identify policy-relevant research gaps for the network‘s future work. The report is, at the same time, an invitation to participate in the discussions on how investment, production and trade will be reorganized in a global economy that has to respond to geopolitical challenges.

Dr. Gideon Ndubuisi speaks about the launching of the "Sustainable Global Supply Chains Report 2022"

How important is GVC Participation to Export Upgrading

Abstract Exporting higher‐quality and complex products are deemed pathways to economic growth and development. However, producing such products are knowledge‐intensive and require quality intermediate inputs and advanced technologies. Integration into global trade networks is increasingly argued to be amongst the pathways to obtain such inputs and technologies, although not all countries may benefit equally from such integration. This paper builds on these arguments and investigates how participation in the global value chain (GVC) affects the quality of exported products. Using a highly disaggregated product‐level export data from 122 countries, we find that participation in (backward and forward) GVC impacts positively on the quality of exported products and brings the quality level closer to the quality frontier. While this result persists in the sub‐sample comprising developed countries, developing countries only benefit from backward GVC participation. Overall, the results indicate that GVC participation matters to export upgrading but points to a potential heterogeneity on the channel of impact across countries at different levels of development.

Exporters and global value chain participation: Firm-level evidence from South Africa

Using the South African Revenue Service and National Treasury firm-level panel data for 2009-17, this paper investigates how global value chain-related trade affects the export performance of manufacturing firms in South Africa. In particular, the paper uses extant classifications of internationally traded products to identify different categories of global value chain-related products and compares the productivity premium of international traders for these different categories. Also, the paper investigates possible differences in learning-by-exporting effects across the identified categories of global value chain-related products by estimating the effect of exporting before and after entry into foreign markets. The results confirm that global value chain-related trade is associated with a higher productivity premium compared with traditional trade. However, within the categories of exporters, only the firms that trade in global value chain-related products and simultaneously engage in research and development in the post entry periods appear to learn from exporting.

Export Variety and Imported Intermediate Inputs: Industry-Level Evidence from Africa

Imported intermediate inputs offer access to lower-priced, higher quality, and a wider variety of inputs that can increase the possibility of producing and selling more diversified products in foreign markets. In this paper, we examine this relationship using a novel manufacturing industry-level data across 26 African countries over the 1995-2016 period. We find strong evidence of a positive relationship between imported intermediate inputs and the variety of exported products. Further analyses in the study indicate that imported intermediate inputs positively affect the variety of exported products because they offer lower-priced, and higher-quality/technology embodied inputs. However, the positive effect of imported intermediate inputs on the variety of exported products depend on industry's absorptive capacity, especially when the inputs are sourced from advanced countries. We discuss the implications of our findings.