Energy shocks, war, and supply chain reconfiguration: The case of Italy and Spain in ceramic tiles

This paper examines the evolution of the European ceramic tile supply chain, focusing on Italy and Spain within the broader transformation of Global Value Chains and the sequence of shocks that have affected the sector, including the 2008 financial crisis, the COVID-19 pandemic, the energy crisis, and the Russia--Ukraine conflict. To this end, we develop a stylized game-theoretic simulation framework in which the two countries are represented as populations of firms facing distinct export demand conditions and competing indirectly for inputs supplied by common upstream markets. The model belongs to the class of aggregative games with population dynamics, where strategic interaction emerges through aggregate output and input demand. The framework allows us to investigate how downstream market positioning influences sourcing decisions and the transmission of supply-side disruptions. The results reveal heterogeneous adjustment dynamics across countries. Firms operating in higher-value market segments appear less sensitive to input-cost shocks and display a greater capacity to preserve profitability under adverse conditions. By contrast, firms facing stronger competitive pressure exhibit more responsive procurement dynamics and greater adaptability to changing market conditions. Rather than identifying a universally superior industrial configuration, the findings highlight a trade-off between robustness and adaptability in the management of supply-chain disruptions. The paper contributes to the literature on Global Value Chains and industrial resilience by providing a mechanism-based interpretation of how downstream market structures interact with upstream sourcing constraints under recurrent shocks.