Drivers of the crisis of hyper-globalization: national trajectories and disputes between the global North and South. A clustering approach

Abstract

Purpose This paper aims to analyze how the benefits of chain production have not been equitably distributed between the countries of the South and the North, creating a system of winners and losers that is now, 40 years later, leading to confrontation to establish a new global economic governance. Design/methodology/approach The methodology of this paper uses trade and GDP data from EORA-United Nations Conference on Trade and Development (UNCTAD) and the World Bank, applying K-means clustering. This unsupervised machine learning technique groups data points into clusters based on similarities. This method classifies countries into distinct trajectories within Global Value Chains (GVCs), distinguishing between Global North (GN) and Global South (GS) nations. By identifying economic growth and trade patterns, K-means helps reveal the unequal distribution of hyper-globalization’s benefits and its contribution to the current systemic crisis. Findings The findings highlight that hyper-globalization, which fostered the rise of Global Value Chains (GVCs), created clear winners and losers at the global level. The GS experienced more successful national trajectories, while the GN lagged behind. Multinational corporations relocated production to the South for better cost conditions, but after 40 years of these differential outcomes, Northern countries are pushing for reshoring to retain value-generating links. The ongoing trade wars, aiming to reshape the global trade framework, are rooted in these divergent GVC trajectories between the GN and GS. Practical implications These findings have important implications for understanding the economic and political dynamics of the crisis of the hyper-globalization. Originality/value This paper offers a novel perspective by combining critical theoretical frameworks with advanced statistical techniques, such as K-means clustering, to analyze global trade patterns within GVCs. It reintroduces key dimensions of power and national trajectories to the GVC framework, highlighting the unequal distribution of benefits between the GN and GS. By empirically classifying countries’ economic performances, the study provides new insights into the drivers of the hyper-globalization crisis and the current reshoring trend, contributing to the discourse on global economic governance and trade wars.