Phuong Pham, Duke University – February 12^th at 12:30

Complex Global Value Chains and Economic Interdependence: A New Look at the Opportunity Costs Argument” (with Melle Scholten).

Abstract: Among today’s pressing security concerns, increased political and economic tensions between the USA and PRC rank highly for policymakers and the general public in both countries and beyond. Some have raised worries that Beijing’s One-China policy vis-a`-vis Taiwan will ultimately lead to militarized conflict between the two superpowers, with tremendous consequences for global and human security, as well as the global economy. This article contributes to these ongoing concerns and the general scholarly debate on economic interdependence by examining the role of complex global value chains (GVCs) in deterring conflict. It argues that GVC trade should be a far stronger deterrent to escalate conflict than other forms of trade due to the importance of prior global inputs of strategic goods, which cannot be appropriated after conquest. Thus, the global fragmentation of production can have unintended positive spillovers for global peace. The World Integrated Trade Solution (WITS) provides statistical evidence for this theory. In line with the expectations laid out in the article, it is found that GVC trade depresses the probability of conflict onset, whereas no such effect for non-GVC trade is found. The article also illustrates the importance of GVCs for global peace by providing several qualitative case studies, including the global semiconductor supply chain and its role in relations between Taipei, Beijing, and Washington. These findings suggest that GVCs, on the whole, are pacifying and that reshoring can have unintentional negative consequences for global peace.

https://zoom.us/j/98150550037?pwd=OStzeUNJTmp0TGE5SlAxNld3RVgvUT09

Meeting ID: 981 5055 0037

Passcode: science