“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 triggered the creation of large regional blocs, and the gradual weakening of the potential of “labour arbitrage” models in modern international practices. Attention is drawn to the adjustment of GVC business strategies in terms of restructuring supply chains and the emergence of production relocation concepts under “re-shoring”, “de-internationalization” and “international de-vestment” schemes. The concepts of “in-shoring” are highlighted in a separate block, the categorization of which has not yet been standardized by 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 Reshoring index (KRI) allowed 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 for global uncertainty, and the balance of benefits and costs of their use in each specific case requires careful assessment.