The triangle of trade, foreign direct investment, and global value chains in the “new” phase of globalisation

Abstract

This paper examines the transformation of the relationship between international trade, foreign direct investment (FDI), and global value chains (GVCs) in the new phase of globalisation. Drawing on the relevant literature and international statistical evidence, it argues that the period following the 2008–2009 global financial crisis is characterised not by deglobalisation but by a transformation in the operating logic of globalisation. The paper’s main contribution is its integrated analytical framework, which interprets the new phase of globalization through the interaction of international trade, FDI, and GVCs. It argues that these three dimensions cannot be adequately understood in isolation, as they constitute an integrated system in which each continuously shapes the others, and which are mutually dependent on each other. Technological change, growing geopolitical rivalry, and the strengthened role of the state in economic governance have transformed the previous model, which was primarily driven by efficiency maximisation and cost minimisation. International trade, FDI, and GVCs continue to reinforce one another, but their interaction is increasingly governed by a new logic, in which economic rationality is complemented by economic policy and geopolitical considerations. The paper concludes that, based on the evidence available through 2024, recent developments should be interpreted as a structural transformation rather than a reversal of globalisation, while the longer-term implications of developments after 2025 remain an open question.