An institutional mechanism for integrating domestic manufacturing into global value chains

The study reveals the peculiarities of modern global production development due to global value chains (GVCs) formation that allow both developing and developed countries to integrate successfully into international production networks. This research is aimed at identifing key factors responsible for the upstream movement of Ukraine through GVCs and determining locations for production capacities, as well as at developing an institutional mechanism for facilitating the successful integration of domestic producers into GVSs. To achieve this, a multiple linear regression reflecting the interrelation between manufacturing industry share in exports value added and the institutional and economic indicators is analyzed. Three scientific hypotheses are tested and two of them are verified. The multiple linear regression results disclose a significant impact of institutional factors on the country’s ability to participate in GVCs and justify the first hypothesis, namely the higher the government effectiveness and regulatory quality are, the higher the manufacturing value added in exports is. Better governance and administrative functions performance enhance companies’ export potential. The model also verifies the second hypothesis that emphasizes better ability to join GVCs with low and medium technology product than with a high technology one. The model outputs contradict the third hypothesis on the protectionism: high tariffs for imports significantly matter in exports promotion. However, this result should be considered while accounting for the global trend of trade liberalization and Ukraine’s international agreements. The article proposes policy recommendations for improving the positions of Ukraine in GVCs.

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Assessing the Involvement of Industries in Global Value Chains

SHS Web of Conferences ◽

10.1051/shsconf/202112603001 ◽

2021 ◽

Vol 126 ◽

pp. 03001

Author(s):

Viktoriia Khaustova ◽

Olena Reshetnyak ◽

Mykyta Khaustov ◽

Taras Danko ◽

Natalia Danko

Keyword(s):

Manufacturing Industry ◽

Value Added ◽

Global Value Chains ◽

Graphical Analysis ◽

Added Value ◽

Value Chains ◽

Low Grade ◽

Virtual Absence ◽

Export Structure ◽

The Government

The purpose of the article is to assess the involvement of industries in global value chains and determine the prospects for intensification of these processes. The research methods are statistical analysis, comparison, graphical analysis. The role of export volumes of high value-added products, their enclosing in global value chains is determined. A methodical approach to assessing the involvement of industries in global value chains is proposed, allowing to detect the state of the country’s involvement in the international distribution of labour in concordance with specific industries. The analysis of the structure of exports of industries on the example of Ukraine is carried out. the industries that have a significant export share both in the total exports and in the structure of production output are determined. The leading indicators of the country’s involvement in global value chains are computed, as follows: the national added value in the country’s exports by industries, the contribution of specific industry sectors of the economy to the national added value of gross exports, the share of the national added value in exports of industries in the total national added value of gross exports. The positioning of industries within the coordinate system «share in the export structure - share of the national added value in exports» is carried out. It is determined that the share of national added value in exports of extractive industries of Ukraine is higher compared to the average of the world countries in this research. At the same time, being lower in the industries of the manufacturing industry, thus justifying the virtual absence of knowledge-intensive and innovative stages of production of the manufacturing industry, which necessitates a deeper specialization in the exports of low-grade products. The directions of a rational integration of the Ukrainian economy into global value chains are substantiated. The measures to be assumed on the part of the government policy to intensify the involvement of Ukrainian producers in global value chains are proposed.

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Measuring Global Value Chains

Annual Review of Economics ◽

10.1146/annurev-economics-080217-053600 ◽

2018 ◽

Vol 10 (1) ◽

pp. 207-236 ◽

Cited By ~ 28

Author(s):

Robert C. Johnson

Keyword(s):

Multinational Firms ◽

Bilateral Trade ◽

Value Added ◽

Global Value Chains ◽

Value Chains ◽

Production Networks ◽

Input Output ◽

Firm Level ◽

Level Data ◽

Production Stages

Recent decades have seen the emergence of global value chains (GVCs), in which production stages for individual goods are broken apart and scattered across countries. Stimulated by these developments, there has been rapid progress in data and methods for measuring GVC linkages. The macro approach to measuring GVCs connects national input–output tables across borders by using bilateral trade data to construct global input–output tables. These tables have been applied to measure trade in value added, the length of and location of producers in GVCs, and price linkages across countries. The micro approach uses firm-level data to document firms’ input sourcing decisions, how import and export participation are linked, and how multinational firms organize their production networks. In this review, I evaluate progress in these two approaches, highlighting points of contact between them and areas that demand further work. I argue that further convergence between these approaches can strengthen both, yielding a more complete empirical portrait of GVCs.

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Opportunities for the integration of the Ukrainian industry into global value chains

University Economic Bulletin ◽

10.31470/2306-546x-2018-39-65-74 ◽

2018 ◽

pp. 65-74 ◽

Cited By ~ 1

Author(s):

Оksana Kushnirenko ◽

Olga Zarudna

Keyword(s):

Production Systems ◽

Negative Impact ◽

Value Added ◽

Global Value Chains ◽

Value Chains ◽

Manufacturing Companies ◽

Production Networks ◽

Processing Industry ◽

Pass Through ◽

The Impact

Relevance of the research topic is due to the impact of globalization which had brought an increasing number of more and more products pass through global value-added chains to reach the end users. That has led to new forms of transnational production, that gives new opportunities for Ukrainian producers. Formulation of the problem. The utilizing the opportunities and mitigating the negative impact of the liberalization of foreign trade makes new requirements for production oriented businesses in a more open and competitive international environment. The development of global production systems provides opportunities for participating in global value chains, that opens up new opportunities for the industry of Ukraine and requires further scientific researches. Analysis of recent research and publications. There are various dimensions to the development of global value chains of industry that need to be taken into account. The most important of these are P.Marsh, R.Kaplinski and Morris, K.Schwab, R.Rajk, D.Rodrik, E.Rajnert, S.Veber, P Labasta, G. Dzerffi, Geets VM, Vishnevsky AS, Deineko LV, Kizim NA, Kvasha TK, Lyashenko VI, Musina LA, Pyatnitsky VT, Sidenko V.R. and others. Selection of unexplored parts of the general problem. In the context of increasing influence of integration processes on the development of international trade and production, the problem of choosing the most effective ways of integration into global value chains for the processing industry of Ukraine as a reliable supplier of products with a higher degree of processing remains insufficiently studied. Setting the task, the purpose of the study. The objective of the article is to analyze the features of the formation of value added chains and ways of integrating them into the processing industry of Ukraine as a reliable supplier of products with a higher degree of processing. The purpose of the study is developing the proposals for possible constructive ways of promoting the integration of Ukrainian processing industry into global value-added chains. Method or methodology for conducting research. This paper used of general scientific: abstract-logical, induction and deduction, systemic approach; analysis, and synthesis and special scientific research methods: statistical comparisons, grouping, sampling; structure-functional analysis, expert judgments. Presentation of the main material (results of work).The existing approaches to the definition of the notion of value added chains are disclosed and their grouping is carried out on significant grounds; The features and modern trends in the development of global value chains in the processing industry are explored; The opportunities and the existing risks have been identified in the chain of value added for the developing countries; and substantiated practical recommendations for choosing the most effective ways of integration into global value chains for the processing industry of Ukraine as a reliable supplier of products with a higher degree of processing. The field of application of results. The results of this research can be applied in the process of formation and implementation of Ukraine's integration industrial policy. Conclusions according to the article. In the article authors was made in assessment of the integration of Ukrainian manufacturing companies into global value chains. The adoption of effective tools and instruments for encouraging the entry of Ukraine's processing industry into global value chains provides for the creation of effective policies and institutions, aimed at eliminating restrictions in the the Ukrainian producers integration into international production networks.

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A Review of Literature of Global Value Chains

10.31235/osf.io/kgryp ◽

2021 ◽

Author(s):

Sourish Dutta

Keyword(s):

Large Scale ◽

Value Added ◽

Global Value Chains ◽

Division Of Labour ◽

Value Chains ◽

Production Networks ◽

International Production ◽

International Borders ◽

Home Based ◽

Business Functions

The phenomenon of global value chains (GVCs) indicates a division of labour type production structure in which tasks and business functions are distributed among several companies, globally, or regionally (Grossman and Rossi-Hansberg 2008). The critical features of GVCs are therefore the international dimension of the production process and the "contractualisation" of buyer and seller relationships, often across international borders (Antras 2016). As a result, these international production networks are highly complex regarding geography, technology, and the different types of firms involved (from large retailers and highly large-scale mechanised manufacturers to small home-based production). Sometimes it may be impossible even to identify all the countries that are involved or the extent of their involvement (Gereffi and FernandezStark 2016). However, the recent development of OECD-WTO’s Trade-in Value Added (TiVA) data represents a fundamental step forward in understanding GVC trade. Grossman & RossiHansberg (2008, 2012) rightly point out that the different tasks, rather than sectors, define the specialisation of countries in the value chains.

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Multi-Stakeholder Initiatives and Corporate Social Responsibility in Global Value Chains

Comparative Perspectives on Global Corporate Social Responsibility - Advances in Business Strategy and Competitive Advantage ◽

10.4018/978-1-5225-0720-8.ch012 ◽

2017 ◽

pp. 241-257

Author(s):

Ahmad Hassan ◽

Peter Lund-Thomsen

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Manufacturing Industry ◽

Work Conditions ◽

Developed Countries ◽

Global Value Chains ◽

Value Chains ◽

Multi Stakeholder ◽

Corporate Social ◽

Governance Processes

In this chapter, we make a contribution to the literature on corporate social responsibility in global value chains that link dispersed consumers and importers in developed countries with local manufacturers, workers, and communities in developing countries. We create an integrated analytical framework and a methodology that can guide master-level and Ph.D. students as well as practitioners on how they may map the governance processes through which multi-stakeholder initiatives (MSIs) in global value chains are formulated, implemented, monitored as well as the impact that MSI standards have on the work conditions of those laboring at the base of global value chains. We use a stylized case study of fair trade in the football manufacturing industry in Pakistan to illustrate how the framework and the methodology might be applied to the empirical analysis of MSI governance processes and their impacts on workers' conditions in export-oriented industries in the South.

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A Review of Literature of Global Value Chains

10.31219/osf.io/mue8q ◽

2021 ◽

Author(s):

Sourish Dutta

Keyword(s):

Large Scale ◽

Value Added ◽

Global Value Chains ◽

Division Of Labour ◽

Value Chains ◽

Production Networks ◽

International Production ◽

International Borders ◽

Home Based ◽

Business Functions

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Effect of Technological Innovation Inputs on Global Value Chains Status

Journal of Global Information Management ◽

10.4018/jgim.20210901.oa3 ◽

2021 ◽

Vol 29 (5) ◽

pp. 37-54

Author(s):

Shuili Yang ◽

Yang Yi

Keyword(s):

Industrial Development ◽

Manufacturing Industry ◽

Applied Research ◽

Value Added ◽

Basic Research ◽

Global Value Chains ◽

Moderating Effect ◽

Value Chains ◽

Development Environment ◽

Long Run

Under the backdrop of the continuous escalation of the Sino—U.S. trade friction, China's industrial development environment in global value chains (GVCs) has further deteriorated, research on the improvement GVC status of the Chinese manufacturing industry has become the focus of attention for industry and academia. The direction of R&D inputs are of utmost importance to the improvement of GVC status. However, comparatively little attention has been paid to this topic in existing studies. Following the production activity decomposition framework and combining with the World Input-Output Tables, the action mechanism of R&D inputs on GVC status from two aspects of industrial value-added and embedding position were analyzed, the moderating effect of digital servitization was demonstrated. Results show that: The input of applied research has inverted U-shaped influence on the industrial value-added, while it has U-shaped influence on embedding position; The input of basic research has U-shaped influence on the industrial value-added, while it has inverted U-shaped influence on embedding position; The moderating effect of digital servitization between R&D inputs and GVC status is significant, in the short term, the digital servitization can not only magnify the promotion effect of the applied research inputs on GVC status, but also shorten the lag period of basic research inputs on GVC status. In the long run, the digital servitization can not only weaken the marginalization trend of the applied research inputs on GVC status, but also enhance the positive feedback effect of basic research inputs on GVC status. This study is important for China to improve the GVC status.

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Impact of Global Value Chains on Export Technology Content of China’s Manufacturing Industry

Sustainability ◽

10.3390/su12010432 ◽

2020 ◽

Vol 12 (1) ◽

pp. 432 ◽

Cited By ~ 1

Author(s):

Jing Peng ◽

Yabin Zhang

Keyword(s):

Production Process ◽

Manufacturing Industry ◽

Home Country ◽

Developed Countries ◽

Global Value Chains ◽

Manufacturing Industries ◽

Value Chains ◽

Intermediate Inputs ◽

Domestic Technology ◽

Chinese Manufacturing Industry

With the deepening development of global value chains (GVC), a large number of foreign intermediate inputs have been integrated in the products production process of one country, thus the technology content of export products may not completely come from the home country. According to the new measurement based on production process, this paper calculates the domestic technology content of China’s manufacturing industry from 2000 to 2014 by using the data of World Input–Output Database (WIOD). Furthermore, it has an empirical analysis of the effect of GVC position on domestic technology content using the panel data of China’s 18 manufacturing industries. The results showed that: the technology content of the China’s manufacturing exports are increasing, and the domestic technology content grows faster than overall technology content, which indicats that China’s manufacturing industry has been upgraded and optimized in a certain way; However, there is still a certain gap between China’s manufacturing technology content and the corresponding indicators of major developed countries; And the upgrading of GVC position of Chinese manufacturing industry can significantly improve the domestic technology content of manufacturing exports.

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Determinants of SME integration into global value chains

Journal of Advances in Management Research ◽

10.1108/jamr-02-2017-0013 ◽

2017 ◽

Vol 14 (3) ◽

pp. 313-331 ◽

Cited By ~ 2

Author(s):

Chandra Mouli V.V. Kotturu ◽

Biswajit Mahanty

Keyword(s):

Manufacturing Industry ◽

Global Value Chains ◽

Value Chains ◽

Production Networks ◽

Global Production Networks ◽

Key Factors ◽

Automotive Component ◽

Content Type ◽

Factors Influencing ◽

Component Manufacturing

Purpose In recent years, due to intense competition, small and medium-sized enterprises (SMEs) are unable to meet performance expectations and find difficulty in fulfilling the needs of the original equipment manufacturers (OEMs). Consequently, the growth of the SMEs has slowed down considerably. Constrained by their infrastructural resources, SMEs’ participation in global value chains (GVCs) has the potential to bring significant benefits, such as enhancing technological learning and innovation and generating positive contributions to the development of the SMEs. The purpose of this paper is to explore competitive priorities, key factors, and causal relationships influencing SMEs to enter GVCs. Design/methodology/approach In this paper, the GVC framework is adopted and qualitative feedback loop analysis is used to identify the key factors influencing the competitive factors. A questionnaire survey was carried out with the automotive component manufacturers of a transnational corporation in India. Findings The survey in the automotive component manufacturing industry reveals product quality standards as the most important priority for joining global production networks, followed by price competitiveness, timely delivery, innovativeness, manufacturing flexibility, service, and dependability. The qualitative findings reveal continuous personnel training, capacity expansion, research development, and others as key factors influencing competitiveness. Practical implications To retain SMEs’ role in economic development and to accelerate the growth of global production networks in India, thereby realizing opportunities from the emerging GVCs, support is needed for SMEs regarding the aspects identified in this study. Originality/value The study explores the dynamics of each competitive priority of SMEs in Indian automotive component manufacturing industry to enter the GVCs. No study has explored the dynamics of SMEs competitiveness to enter GVCs in the automotive manufacturing industry.

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