COVID-19 has disrupted global value chains (GVCs). Some observers expect firms to respond by abandoning their pursuit of lower production costs in favour of building stronger resilience in production – by reshoring, nearshoring, and/or diversifying sources of production (e.g. Javorcik 2020, Kilic and Marin 2020, Lund et al. 2020, UNCTAD 2020). In contrast, others have argued that the same technological and institutional factors that have underpinned the international fragmentation of production in the past decades would make a retrenchment of GVCs post-COVID-19 unlikely, unless there is a radical change in the policy environment (Antràs 2021, Baldwin 2020).

The long-term impact of natural disasters on global value chains and their organisation is ultimately an empirical question. To understand how firms behave when faced with new risks, we examine in a recent paper how trade patterns adjusted in the longer term after…

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