Jurnal Ekonomi Malaysia

Shock Propagation in Global Value-Added Trade: A Network-Based Simulation of Supply and Demand Crises
Penyebaran Kejutan dalam Perdagangan Nilai Ditambah Global: Simulasi Krisis Bekalan dan Permintaan Berasaskan Rangkaian

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

p1119770@siswa.ukm.edu.my

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

fatin@ukm.edu.my

Faculty of Science and Technology
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

fatima84@ukm.edu.my

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

zak1972@ukm.edu.my

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

hafizhazam@ukm.edu.my

Abstract

This study examines countries’ exposure to supply- and demand-side shock propagation in the global trade-in-value added (TiVA) network, with a particular focus on shocks originating from China and the United States using the 2008 and 2018 baseline networks. The study applies network metrics and the Trade Network Shock Propagation (TNSP) model to bilateral TiVA data covering 49 countries from 2008 to 2020. Under the 2018 baseline, supply shocks from China or the United States affect 93.8% of countries in the network. Demand-shock simulations show rising systemic exposure: in 2008, the United States triggered the largest avalanche, while by 2018, China produced an avalanche ratio of 97.9%, matching that of the United States. These findings indicate that both supply- and demand-side disruptions originating from core economies can generate extensive contagion throughout the global TiVA network. The study extends trade network analysis by integrating value-added trade data with scenario-based shock-propagation modelling. Policymakers should monitor concentrated supplier-buyer dependencies, diversify supplier and market exposure, and strengthen regional trade coordination.

Keywords

Global value chains; network analysis; trade network; Value-added trade

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Ismail, I. I., Said, F. F., Abdul Razak, F., Abd Karim, Z., & Mohd Azam, A. H.

(2026). Shock Propagation in Global Value-Added Trade: A Network-Based Simulation of Supply and Demand Crises. Jurnal Ekonomi Malaysia, 60(2), -.

@article{ismail2026shock,
  title={Shock Propagation in Global Value-Added Trade: A Network-Based Simulation of Supply and Demand Crises},
  author={Ismail, Idzrin Idzwana and Said, Fathin Faizah and Abdul Razak, Fatimah and Abd Karim, Zulkefly and Mohd Azam, Abdul Hafizh},
  journal={Jurnal Ekonomi Malaysia},
  volume={60},
  number={2},
  pages={–},
 

year={2026},
}

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