Global value chains and disasters

We assess the disruptive potential of disasters on global value chains (GVCs) using comprehensive data on GVC trade and disasters. Analyzing 62 countries from 2007 to 2020, we find that a typical disaster reduces forward and backward linkages by at least 27% on average. Our analysis uncovers that more prolonged and intense disasters further weaken GVC linkages, with climate-related disasters being the most disruptive due to their severity and frequency. We also reveal how the positions of developing countries in GVC linkages and inadequate responses amplify these effects. Finally, we discuss policy implications for building a more resilient global production network.