Do Firms React to Supply Chain Disruptions?

Since the outbreak of the Covid-19 pandemic, the disruption of supply chains has become a major concern for global firms. This article uses a representative sample of Spanish manufacturers that participate in global value chains to analyze whether firms are implementing strategies to respond to this concern. Using data for the period 2017–2022, we find that, on average, manufacturers have not increased the number of countries from which they source their input since the Covid-19 pandemic. Firms have not either shifted their imports to countries that are geographically and geopolitically close to Spain, and have not reshored imports. However, firms have significantly increased the stock of intermediates. Firms only diversify when they have one supplier, export to many destinations, and the imported input has a high risk of experiencing a supply chain disruption. Firms nearshore and friendshore when their main supplier is geographically distant.