Geoeconomic Fragmentation and Global Supply Chains Implications for Productivity and Growth

• David Moretti

  University of The Bahamas

  Author

Geoeconomic fragmentation has become a critical force reshaping international trade and production networks. As global value chains face disruptions driven by geopolitical rivalry, sanctions, and strategic decoupling, countries and firms encounter rising production costs, weaker knowledge spillovers, and lower economies of scale. This paper analyzes how fragmentation reshapes global supply chains and evaluates its implications for productivity and economic growth. Using a conceptual and theoretical approach, we examine the mechanisms through which political tensions alter supply-chain configurations and reduce global efficiency. The findings indicate that fragmentation leads to supply‑chain duplication, slower innovation diffusion, and diminishing global interdependence. We provide a comprehensive framework for understanding these structural shifts and offer policy insights for balancing resilience and efficiency.

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