“Regionalization” of Global Value Chains: Off-Shoring or Re-Shoring?

Abstract

The article examines the evolution of theoretical ideas about the regionalization of production activities of global value chains (GVCs). The paper reveals the division of “factory” and “headquarters” economies, which gave impetus to the formation of large regional blocs, and the gradual weakening of the potential of “labor costs arbitrage” models in modern world practice. Attention is drawn to the adjustment of GVC business strategies in terms of restructuring supply chains and the emergence of concepts of production relocation according to the schemes “re-shoring”, “de-internationalization” and “international de-vestment”. The concepts of “in-shoring” are highlighted in a separate block, the categorization of which has not yet been standardized by the experts. The practice of implementing “return” strategies is analyzed using the example of leading developed and developing countries. Changing approaches to regional concentration of production in the United States using the A.T. Kearney agency's specially developed Reshorig index (KRI) made it possible to conclude that in the early 2020s re-shoring in the US has evolved from a strategic opportunity into a powerful market reality. However, it is concluded that offshoring/reshoring can hardly be considered a panacea in terms of global uncertainty, and the balance of benefits and costs of their use in each specific case requires careful assessment.