From the editor: COVID-19 and international business policy

Abstract

We introduce a special collection of papers on COVID-19 and international business policy that looks at the global policy challenge from different perspectives. The combination of confinement and protectionist measures including export bans, import tariffs and border closures that were introduced in response to the COVID-19 pandemic affect MNEs by increasing trade costs and amplifying the costs of communicating tacit knowledge. In this editorial, we draw specific attention to how these policies impact the heart of MNEs' activities-the knowledge-intensive intangibles. Physical distancing limits the face-to-face meetings that undergird the production of intangibles in large urban hotspots. At the same time, travel restrictions constrain MNEs' abilities to connect to and source knowledge from their foreign partners. Virtual conferencing has helped MNEs to cope with these challenges but it remains an imperfect substitute. A protracted public health crisis that would require limiting social interactions in the medium term might push MNEs to reconfigure their knowledge management strategies both locally and globally.

Trade policies, firm strategies, and adaptive reconfigurations of global value chains

“…The global financial crisis significantly affected GVCs across sectors, prompting supply chain rationalization, geographic and organizational consolidation, and shifting the end market to the Global South (Cattaneo, Gereffi & Staritz, 2010 ; Gereffi, 2014 ). Most recently, the global pandemic of COVID-19 and the ensuring disruptions have been unsettling GVCs more than ever (Gereffi, 2020 ; Van Assche & Lundan, 2020 ).…”

Trade, investment and intangibles

“…These questions are of key concern in developed countries that have a comparative advantage in skill-intensive intangible activities, but also in developing countries that aim to upgrade into higher value-added GVC activities. There is a growing appreciation that this requires novel policy prescriptions that differ from traditional public policies (Gereffi and Sturgeon, 2013[80]; Van Assche, 2017 [81]).…”

“…The importance of a place's exposure to the inflows and outflows of physical goods and intangible knowledge provides a rationale for global connectedness policies. On the physical goods side, this includes eliminating barriers to trade and investment so that countries can fully exploit their latent comparative advantage while at the same time having access to the most productive value chain partners across the globe (Van Assche, 2017 [81]). It also includes the development of an efficient and robust transportation infrastructure that allows for the cheap trade of physical components with value chain partners (Memedovic et al, 2008[107]), but also the hassle-free ability to travel for business purposes.…”

Reshaping the policy debate on the implications of COVID-19 for global supply chains

“…This is where the international business (IB) and global value chain (GVC) literature can provide further insights. For the IB community, COVID-19 can be seen as an opportunity to bring to policy circles the knowledge on firms and the organization of multinational enterprises (MNEs) that can help to shape the debate on the resilience of supply chains, in line with the ambition of the Journal of International Business Policy (Van Assche, 2018;Van Assche & Lundan, 2020). As noted by Lorenzen, Mudambi and Schotter (2020), studying MNE risk mitigation strategies in the context of COVID-19 can be a fruitful avenue for IB research.…”