The outputs of the projects are three papers submitted to refereed journals:

  • Up or down the value chain? The comparative analysis of the GVC position of the economies of the New EU Member States by Jan Hagemejer and Mahdi Ghodsi

    Since the transition of Central and Eastern European countries in 1990s, the ongoing liberalization of international trade has changed the structure of these economies. Further structural changes occurred as these countries became the New Member States (NMS) of the European Union in the first decade of the 21st century. In this paper, we shed lights on these changes by analyzing the position of NMS within the global value chains (GVC). By calculation of upstreamness measures proposed by Antras et al. (2012), and tracing both the structure and the evolution of upstreamness over time, we are able to analyze the change in the organization of production around the world and the role the NMS play in the most important export sectors. Although we observe a global increasing trend in the upstreamness of all countries, we find the convergence in the distance from final demand in trade of NMS and the EU15. There are, however, some large and persistent sectoral differences.

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

    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.

  • Trade and growth in the New Member States. The role of global value chains by Jan Hagemejer

    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.