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Corona-shock Hits the Economy – To What Extent Finland Is Dependent on Global Value Chains?

Author

Listed:
  • Ali-Yrkkö, Jyrki
  • Kuusi, Tero

Abstract

The spread of Coronavirus (SARS-CoV-2) has caused distortions to global value chains. This report studies how dependent Finnish companies and industries are on raw materials, components and other intermediate goods/services that they use in their own production. Our results suggest that the great majority of the supply of key intermediates such as electronic components, parts of motor vehicles and medical products and their ingredients are sourced abroad. Over 80% of these intermediate goods/products are sourced abroad. In several industries critical to society, the shares are substantially lower. In the Food industry, 20% of intermediate goods are sourced abroad. In Agriculture and in the Energy supply the shares are 14% and 25%, correspondingly. The spread of Coronavirus and the corresponding preventive measures cause distortions to global value chains. Therefore, economic policy should provide means and tools that help to sustain and re-organize them.

Suggested Citation

  • Ali-Yrkkö, Jyrki & Kuusi, Tero, 2020. "Corona-shock Hits the Economy – To What Extent Finland Is Dependent on Global Value Chains?," ETLA Brief 87, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:briefs:87
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    More about this item

    Keywords

    Global value chain; GVC; Imports; Dependence; Resilience; Value added;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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