International production, trade and investments are increasingly organized within so-called global value chains (GVCs) where the different stages of the production process are located across different countries. Globalization motivates companies to restructure their operations internationally through outsourcing and offshoring of activities.
Firms try to optimize their production processes by locating the various stages across different sites according to the most optimal location factors across countries. The past decades have witnessed a strong trend towards the international dispersion of value chain activities such as design, production, marketing, distribution, etc.
The functional and spatial fragmentation that has occurred within GVCs has significantly reshaped the global economic landscape, thereby raising some new major policy challenges for OECD countries and emerging countries alike: trade policy, competitiveness, upgrading and innovation and the management of global systemic risk.
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