From “New research spells out the benefits of diverse supply chains” (The Economist):
https://www.economist.com/finance-and-economics/2022/04/23/new-research-spells-out-the-benefits-of-diverse-supply-chains
In most countries, the vast majority of components used to make goods tend to be sourced domestically. About 69% of parts in Europe and more than 80% in the western hemisphere are produced at home, for example. If a firm were to choose to import a critical component instead, it would face a more diverse choice: the market share of the average exporting country in the average industry is a little under a third. Re shoring would therefore tend to reduce the diversification of a supply chain rather than increase it, by making production even more dependent on a single country: the home economy. That could prove costly. The fund estimates that in the face of a big disruption (one that causes a 25% drop in labour supply in a single large producer of critical inputs), the average economy could be expected to suffer a fall in gdp of about 1%. Greater diversification stands to reduce the damage by about half.
IMF on the benefits of supply chain diversification
