Global Value Chains


This website is devoted to the project "Global production chain: value added and productivity of entreprises", headed by Jan Hagemejer and financed by National Science Center

  • The project is financed by the National Science Center NCN (grant number UMO-2013/09/D/HS4/01519).
  • Project started in April 2014 and was completed by October 2016.
  • The objective of the project is to assess how the presence of the economies of the Central and Eastern Europe including Poland in the global production precess affects the level and the growth rate of value added and GDP in the economy and the effectiveness of production processes.The baseline research hypothesis is that of increasing importance of globalization on the production processes in the economies of the CEEC. 
  • The project bridges several strands of economic literature: productivity effects of FDI, convergence, firm-level performance
  • Data used in the project come from several sources the WIOD (the world input-output database) and the Amadeus database of firm-level financial indicators.



Finansowanie| Financing: Narodowe Centrum Nauki, SONATA BIS 2 

Czas realizacji projektu | Timeline: 01.2014 – 12.2015 

Łączny budżet | Total budget: 235 640 zł

  • wynagrodzenia wykonawców | compensation to researchers: 46 800 zł
  • stypendia dla asystentów | scholarships for research assistants:  36 000 zł
  • sprzęt i oprogramowanie | hardware and software: 17 000 zł
  • wystąpienia na konferencjach międzynarodowych | conference talks: 7 000 zł
  • materiały i dane | consumables and data: 99 400 zł
  • koszty pośrednie dla Uniwersytetu Warszawskiego | indirect funding for University of Warsaw: 18 200 zł
  • koszty pośrednie dla Wydziału Nauk Ekonomicznych | indirect funding for Faculty of Economics: 18 200 zł

The objective of the proposed project is to assess how the presence of the economies of the CEECs including Poland in the global production process affects the level of value added in the economy and the effectiveness of production processes.The baseline research hypothesis is that of increasing importance of globalization on the production processes in the economies of the CEECs. The supporting hypotheses are:

The structure of international trade of Poland and the CEEC has changed over the recent two decades. The importance of both imports and exports of intermediate goods has increased. The output of export-intensive industries, which is believed to be the major growth driver in these economies, is to a larger and larger extent dependent on the imports of intermediate goods. As these imports usually contain a considerable share of value added, the content of domestic value added in exports is usually largely overestimated.

The multinationals and other foreign-owned enterprises are more productive than their domestic counterparts. The productivity premium is expected to be higher for the sectors that are more intensively involved in the global value chain (a high content of foreign value added in exports, a high share of intermediates imports) due to technology diffusion and learning within the structure of multinationals. There are also sizeable spillover effects that involve technology adoption by domestic entreprises and they lead to productivity improvements. These effects are associated with the intensity of sectoral international trade, in particular trade in value added in global production chains.

The proposed analysis will make it possible to answer the following research questions:

  • Does the relative position in the global value chain affect the process of technology spillovers?
  • Does a high share of domestic value added in exports is a requirement for large domestic gains from international trade?

Opublikowane | Published

  • Upstreamness of employment and global financial crisis in Poland: the role of position in the global value chains | Economics of European Crises and Emerging Markets

    The emergence of global value chains leads to fragmentation of the production processes and reallocation of those processes across countries. With increasing number of production stages, the manufacturing process is located increasingly further away from the consumer. Literature suggests that fragmentation of production increases the international transmission of shocks. The global financial crisis is believed to lead to consolidation and shortening of global value chains and amplification of demand shocks along the global value chains, the so-called bullwhip effect. In this paper we study the effects of global financial crisis on employment, focusing specifically on the role of the distance from final demand (upstreamness) in this adjustment. We find that upstreamness matters for both labor demand and adjustment in employment during the periods of crisis, but this relationship is heterogeneous across countries. While the reaction to the crisis is indeed amplified further away from final demand, contrary to our expectations it is mostly channeled through lower job creation rates rather than faster job destruction. Moreover, the adverse effects of the crisis are lower in foreign firms, this difference does not depend on the distance from final demand.

  • Trade and growth in the New Member States. The role of global value chains | Emerging Markets Finance and Trade

    We analyze the determinants of value added and productivity growth of New Member States in the period between 1995 and 2009. We show that in the analyzed countries exports contributed to roughly 30 to over 40% of the overall growth of GDP while the contribution of the domestic component varied from negative to over 60%. We show that in the most important export manufacturing industries of the NMS, the growth in exported value added was substantial, while the growth of the domestic component of GDP was mostly due to the growth in services. We associate growth of sectoral productivity with the foreign direct investment and exporting but, more importantly, with the position of a sector/country in the global value chains. We show that sectors that have imported intermediate goods have experienced higher productivity growth. Moreover, productivity growth was found in sectors further away from the final demand and in sectors exporting intermediate goods.

    • This paper uses the WIOD data together with the accompanying Social and Economic Accounts.
    • You can compute the GVC measures used in the paper (WWZ, 2013) using the Decompr R package.
    • The codes computing the GDP growth decompositions presented in the paper can be downloaded below, if you use it or any part of it in your research, please, cite our paper. This code assumes that you have the WWZ (2013) decomposition ready.
  • Up or Down the Value Chain? A Comparative Analysis of the GVC Position of the Economies of the New EU Member States | Central European Economic Journal

    The pattern of trade of the Central and Eastern European countries has been changing since the beginning of the economic transition in the early 1990s. By the end of the century this process was additionally strengthened by their integration with the European Union and overlapped with the development of global value chains (GVC) spanning across Europe with which the new member states (NMS) have become increasingly integrated.

    In this paper, we shed light on these changes by analysing the position of the NMS within the global value chains. We employ the upstreamness measure proposed by Antràs et al. (2012) and use the World Input–Output Database. Although we observe a global increasing trend in the upstreamness of all countries, we find that the NMS have in many cases gone against this trend while converging in their production structure within their group and with the EU-15. This convergence is mostly observed in Czech Republic, Hungary, Poland and Slovakia where the level of upstreamness in the most important exporting sectors was close to that of Germany by the end of the analyzed period 1995–2011.

    • This paper uses the WIOD data
    • The STATA code used to compute the U measure can be downloaded below. If you use it or any part of it in your research, please, cite our paper. This code assumes that you have all the WIOD data in one Stata file.

W toku | Work in progress

  • Productivity spillovers in the GVC. The case of Poland and the New EU Member States

    The New Member States have been experiencing firm internationalization not only through inward foreign direct investment but also through exporting, importation of foreign technology in investment goods and increased use of imported intermediates. We argue that there are important productivity spillovers within the global value chains, ie. FDI alone does not tell the whole story of the reallocation processes going on in the economies of the NMS. We augment the standard TFP spillover empirical model with modern measures of GVC participation. We show that increased foreign content of exports brings additional productivity gains on top of the ones attributed to exporting. Moreover, we show that in selected cases, participation in the GVC leads to a smaller productivity gap between foreign and domestic firms. In Poland the productivity gains for domestic firms are located in production of intermediate goods with high foreign value content as well as in goods located close to the final demand. In many other NMS the benefits are concentrated close to the final demand.

    • This paper uses WIOD data and Amadeus database.
    • You can compute the GVC measures used in the paper using the Decompr R package.
    • The codes used to compute the Levinsohn-Petrin TFP from firm-level data, the FDI spillover measures from WIOD and Amadeus can be found here and some trade aggregates can be downloaded below. If you use it or any part of it in your research, please, cite our paper.