Abstract
Nowadays, global production networks (GPN) and global value chains (GVC) play an important role in the world economy intensifying the trade and production networks and resulting in products having value-added in different countries. The analysis of how many intermediate products a country imports in order to produce a product and of how many products a country exports to another country in order to produce new products draws the attention to value-added trade. In the present study, we compare the Hungarian and Polish value-added trade of chemicals and chemical products. We use the OECD-WTO data of value-added trade, which is based on an input-output table. By calculating numerous indices, we reveal that the domestic value-added of chemicals and chemical products in the two countries was relatively low and should be increased by adequate economic policy.
Highlights
Nowadays, production has become globally fragmented owing to trade liberalization and the relatively free movements of capital and labour in many parts of the world
The production of a product is realized in several countries establishing the global value chain (GVC) or the vertical division of labour (WTO 2011), in which both less developed and more developed countries take part (OECD, WTO and World Bank Group 2014; Pomfret – Sourdin 2018)
This paper aims at answering the question of how and why the content of domestic value-added in the Hungarian and Polish gross exports of chemicals and chemical products changed during the years of 1995–2014
Summary
Production has become globally fragmented owing to trade liberalization and the relatively free movements of capital and labour in many parts of the world. In order to become a participant in the GVC, a country needs to ensure the flow of inputs and outputs and the access to high quality trade services and information technology (Pomfret – Sourdin 2018) Concerning international trade, it should be analysed how many intermediate products a country imports in order to produce another product, and how many products a country exports to another country in order to produce new products (WTO 2011). A branch of chemicals and chemical products (C24 by the Organization for Economic Cooperation and Development (OECD) – World Trade Organisation (WTO) classification) was chosen because of numerous reasons In this branch production fragmentation plays a significant role, which is important in the context of domestic value-added share in gross trade. The paper consists of three Sections: (i) literature review on value-added trade, (ii) general overview of chemical industry in the world and in Hungary and Poland, and (iii) a detailed study on the value-added trade of chemicals and chemical products in the two countries
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