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COVID-19 Implications on Global Value Chains in Bulgaria and Romania

Author

Listed:
  • Iskra Christova-Balkanska

    (Economic Research Institute at Bulgarian Academy of Sciences (ERI BAS))

Abstract

New structures formed because of the globalisation of the international economy. Global value chains (GVCs) represent a stage in the development of international production, trade, and investments. The countries of Central and Eastern Europe (CEE) are deeply involved in the European production and trade chains. This involvement stimulated the industrial base modernisation, the creation of new jobs, the expansion of export trade sectors, and foreign direct investment (FDI) attraction. Bulgaria and Romania are part of the European production model because of their inclusion in the European GVCs. Therefore, we have observed a positive effect on their export-oriented and investment policies. The pandemic COVID 19 crisis has a terribly negative effect on domestic and international economic development and growth. Because of the closure of the EU economies, the main European businesses squeezed their production, which reflected not only on the reduction of orders from major trade partners but also on the shrinking of domestic and foreign trade. These adverse effects affect the functioning of GVCs, which are likely to review their current activities and organisation of production. Under these challenging conditions, what will be the consequences for the Bulgarian and the Romanian economies?

Suggested Citation

  • Iskra Christova-Balkanska, 2021. "COVID-19 Implications on Global Value Chains in Bulgaria and Romania," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 9(1), pages 39-47, June.
    • Handle: RePEc:ntu:ntugeo:vol9-iss1-39-47
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    References listed on IDEAS

    as
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    3. Gábor Márk Pellényi, 2020. "The Role of Central and Eastern Europe in Global Value Chains: Evidence from Occupation-Level Employment Data," European Economy - Economic Briefs 062, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    4. Alina Petronela NEGREA & Valentin COJANU, 2015. "Innovation In The European Value Chain: The Case Of The Romanian Automotive Industry," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 7(1), pages 126-146, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    European Global value chains (GVCs); European industrial model; Bulgaria and Romania GVC linkages; COVID 19 and implications on economies;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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