The functioning of international trade is important for small open economies such as Finland. Changes in international trade shakes the Finnish economy, and due to our export structure, the economic swings are potentially greater than in many other countries. The Corona crisis has also revealed how dependent Finland is on global value chains. The trade war between China and United States also casts a shadow over the development of international trade.
Corona crisis has also raised a concern of social and economic resilience. This has created a need for information on how this resilience – especially in international trade – could be strengthened. In addition, the trends in value chains are partly uncertain.
This research project studies the development trends of international trade, the factors affecting them and Finland’s sensitivity to shocks in international economy. The project will provide new information especially on the development and cyclical sensitivity of international trade in value chains. The aim is to produce recommendations either on national or EU level on how to improve the resilience of the economy to crisis and reduce cyclical sensitivity.
Finland’s cyclical sensitivity, the factors behind it and the role of value chains as a transmission channel for the crisis are studied using statistical methods. To analyze the future of value chains, company surveys and interviews are used. A special target group for the interviews are companies’ sourcing directors and supply chain managers.
The results of the project will be published in a final report, which will be published in Prime Minister’s Office Publication Series.