Digitalization and Global Value Chain Participation: Microdata Evidence from a Transitional Country

The article is devoted to the analysis of Russian participation in global value chains (GVCs). The author gives a qualitative and quantitative description of the Russian positions in the GVCs, pointing out their imbalance and primitiveness. Special attention is paid to the Russian TNCs’ positions in the global value chains. The article highlights the distinguishing features of their involvement in global value chains, in particular its “regionality”. It is concluded that the Russian companies are guided by the global value chains. In a sectoral context, metallurgy is one of Russian sectors most involved in the global value chains. An increased share of foreign value added in the total exports of Russian metallurgy is singled out as a distinctive feature. Further on, the author analyzes differences of the models of particular Russian ferrous metallurgy TNCs’ policies concerning participation in the global value chains. The examples of such companies as Novolipetskii metallurgicheskii kombinat (NLMC) and Magnitogorskii metallurgicheskii kombinat (MMK) are given. The author makes an attempt to describe the scale and nature of the existing intra-corporate flows of the Russian ferrous metallurgy companies within the global value chains. The description is given of the geographical breakdown of foreign activities of the largest Russian metallurgical companies within the framework of GVCs. The author comes to a conclusion that nowadays the Russian participation in the global value chains in general and in ferrous metallurgy in particular doesn’t correspond to the strategic interests of the nation. It is noted that despite the attempts of Russian ferrous metallurgy TNCs, which largely determined Russian participation in global value chains of this sector, there is a necessity to improve the quality of this participation.&nbsp

Economic globalization creates new opportunities for countries to develop and achieve high rates of economic growth through participation in global value chains. However, many countries, especially developing ones, face economic difficulties due to weak involvement in global value chains and low prospects for moving from the least profitable to more profitable links of the chains. The relevance of the study lies in the need to assess the nature of Russia's participation in global value chains in high-tech sectors in order to understand the prospects for improving the position of Russian companies in the global production system, ensuring a technological breakthrough and sovereignty. In this study, based on the concept of the "smile curve" of global value chains and the ADB MRIO input-output tables for 2000, 2011 and 2021 for 63 countries and 35 industries, an assessment of the nature of participation of companies in high-tech sectors of the Russian economy in global value chains is given for the first time. The distribution of added value for Russian global value chains takes the form of a "smile curve". At the same time, the main beneficiaries of the added value in such chains are domestic service companies. The theoretical significance of the work is due to the original knowledge about the specifics of the involvement of high-tech sectors of Russia in global production, as well as the features of its spatial organization (by identifying key foreign partners) and the transformation of participation in global value chains over the studied period of time. The practical significance of the study primarily comes from the data obtained on the contribution of foreign partners and Russian sectors of the economy to intra- and inter-industry trade in the studied sectors. This made it possible to decompose the studied sector in terms of added value from the point of view of foreign and national final and intermediate products, as well as from the point of view of foreign and national added values.

In the contemporary global economic environment, integration into global value chains is a crucial factor for a country’s economic growth. The aim of this research was to determine the impact of Ukraine’s participation in global value chains on the country’s agro-industrial complex. The study employed statistical analysis, regression analysis, econometric modelling, correlation analysis, and analysis of indices of a country’s participation and position in global value chains. It was established that during 2010-2011, the Ukrainian economy demonstrated high growth rates of gross domestic product and exports due to the growth of foreign value-added. Starting in 2012, growth rates began to decline due to economic crises, political instability, and the war that began in 2014. The COVID-19 pandemic also had a negative impact on the economic situation in 2020. Despite the full-scale war in 2022, a slow economic recovery was observed in 2023, driven by an increase in foreign gross value-added in exports. Regression analysis showed a strong correlation between Ukraine’s gross domestic product and indicators of foreign investment in exports and total exports. It was found that an increase in foreign gross value-added in exports has a negative impact on gross domestic product, while an increase in total exports has a positive impact on economic growth. Despite the complexity of the global value chain system, the results indicate Ukraine’s potential for further integration into global economic processes. It has been found that the agricultural sector is also affected by fluctuations in foreign gross value-added, which is reflected in the productivity and export capabilities of the agricultural sector. An analysis of the participation of key industries, including the agro-industrial complex, in GVCparticipation has shown a trend towards a decrease in the share of foreign value-added in the gross export of industrial products, indicating an increase in domestic value-added. The research results can be used to develop an effective strategy for Ukraine’s economic development by optimising participation in global value chains and reducing dependence on foreign value-added in exports

The well-functioning domestic institutions are very important for the global value chains to have its positive impact on environment. This article provides an empirical assessment of the impact of domestic institutional arrangements along the way to participate in global value chains on environmental performance index for sustainability goals for 41 Asian countries over 2001–2018 period. Most recent empirical studies assumes that causality runs to environmental measures through trade and governance but inverse relationship is also feasible and none of the previous studies have discussed about it. Using instrumental variable strategy to closing these gaps, we analyse the mechanism of direct and indirect impact of participation in global value chains on environmental performance index. Our results show that environmental performance index is negatively affected by participation in global value chains and this relationship overturns when participation in global value chains is accompanied by governance facilitation. Further, the findings suggest that governance-augmented participation in global value chains is a tool of environmental sustainability.

Global value chain (GVC) participation has played a significant role in boosting the trade gains of both developed and developing seafood-exporting countries over the past three decades. In addition, the extent of GVC participation has become the most important platform for addressing gains from trade in developing seafood-exporting countries to ensure that their participation enhances economic growth. Recent studies on GVC participation in developing countries have highlighted the importance of domestic institutions. However, the literature is silent on the quality of the domestic institutions–GVC participation nexus. This paper aims to investigate the determinants of GVC participation and the effect of the quality of domestic institutional governance on seafood-exporting developing countries’ GVC participation indices. Using the Hausman–Taylor (HT) estimator and the system generalised method of moments (GMM) dynamic panel data methodology to examine seafood export data from 32 countries from 2009 to 2018, we find that economic potential drives backward GVC participation, while low forward participation might not only lead to lower gains from trade, but also limit countries to the supply of primary seafood products with little value addition. In addition, the quality of domestic institutional governance constrains GVC participation. Overall the results indicate that the quality of domestic institutional governance matters for the GVC participation of seafood-exporting developing countries.

Based on bilateral trade data from 62 exporting and importing countries (regions) between 2007 and 2021, this study employs the ADB database to measure the global value chain (GVC) participation of exporting countries (regions) and the TAPED database to calculate the depth index of digital trade rules. It explores the mechanisms through which regional digital trade rules influence GVC participation. The findings are as follows: First, digital trade rules in regional trade agreements (RTA) significantly enhance the GVC participation of exporting countries (regions). Second, heterogeneity analysis reveals two key insights: (1) From the perspective of different types of digital trade rules, the depth indices of e-commerce clauses, data flow clauses, new data clauses, cross-cutting issues clauses, and digital intellectual property clauses all promote GVC participation among signatory countries (regions), with new data clauses having the most pronounced effect. (2) From the perspective of heterogeneity in country-pair types among RTA signatories, deeper digital trade rules in RTAs between developing-developing country pairs and developed-developed country pairs positively promote GVC participation of exporting countries (regions). Therefore, exploring the impact of regional digital trade rules on global value chain (GVC) participation holds significant theoretical and practical importance for China in formulating digital trade policies and enhancing its position within the global value chain.

Purpose: This paper investigates the determinants of labor productivity of Turkish manufacturing sectors by taking into account both the global value chain (GVC) participation and the research and development (R&D) expenditure for the period of 1995-2018. Methodology: To analyze the determinants of labor productivity in Turkish manufacturing sectors, we specify the labor productivity model and estimate this empirical model by the Ordinary Least Squares (OLS) and Two-Stage Least Squares (2SLS) methods. Findings: Our estimation results indicate that while simple forward GVC participation enhances the labor productivity of Turkish high-tech manufacturing sectors if they trade with developing countries, complex forward GVC participation increases productivity regardless of trading partners. For low-tech sectors, there is no significant impact of GVCs or R&D on productivity. There is no significant impact of backward GVC participation and sectoral R&D intensity on labor productivity. These significant results provide strong evidence for the importance of deeper involvement of high-tech sectors in GVCs for higher sectoral productivity. Given the strong heterogeneity in terms of sectors and trading partners, specific policies should be targeted to benefit from the productivity gains of the global value chains. Originality: This study contributes to the current studies by focusing on disaggregated measures of GVC participation indices and enlarges the empirical analysis by considering the heterogeneity in trading partners (developed and developing trading partners).

Countries’ participation in the global value chain is significant since it offers them economic benefits. However, the sustainability of life on Earth depends on figuring out how participation in the global value chain affects the environment. Therefore, examining the environmental effects of participation in the global value chain is crucial for the formation, development, or modification of policies concerning nations’ participation in the global value chain. This study aims to examine the influence of variables such as participation in global value chains, technological eco-innovation, natural resource rents, GDP, and population growth on the degradation of the environment in the EU-14 nations. Indicators of environmental deterioration in the research included carbon emissions and ecological footprint. Data on population growth, economic development, carbon emissions, and natural resource rents were all taken from the World Bank database and utilized in the research. Data on ecological footprints, global value chain involvement, and technical eco-innovation were gathered from the Global Footprint Network, the UIBE GVC Laboratory, and the OECD database, respectively. The MMQR approach was used in the research to analyze yearly data for EU-14 nations spanning the years 2007–2021. KRLS and Driscoll-Kraay techniques were also used in the research to assess robustness. The findings indicate that participation in the global value chain across EU-14 nations leads to a decrease in carbon emissions and ecological footprint, resulting in enhanced environmental quality within these countries. Once again, research indicates that in EU-14 nations, technological eco-innovation lowers carbon emissions and ecological footprint. At all quantile levels, it is also discovered that natural resource rents raise carbon emissions and ecological footprint. Additionally, it was discovered that the outcomes of the robustness test agreed with the conclusions drawn. According to the study’s findings, the EU-14 countries should give priority to eco-friendly value chain management techniques in order to maintain environmental quality.

The national innovation systems (NISs) literature has focused on institutional and industrial structures while overlooking creative individual agencies. This gap may leave unanswered the question of why some countries with weak institutional structures still improve global value chain (GVC) participation. This study, thus, investigates how national entrepreneurial dynamism impacts a country’s GVC participation as conditioned by other elements of NISs. The empirical results show that entrepreneurship is positively associated with GVC participation. Additionally, this positive relationship is stronger among countries with lower levels of intellectual property rights (IPR) protection and smaller amounts of R&D employment. The findings suggest that entrepreneurship contributes to a country’s GVC participation and helps a country overcome its institutional weaknesses and, thus, achieve better globalization performance. Therefore, the study adds to NISs literature with creative individual agency, reveals the national internal avenue for GVC participation, and enriches the research on the NIS-GVC relationship.

Using the panel vector autoregressive (PVAR) model accompanied by the system-generalized method of moment (System-GMM) approach, this paper investigates the dynamic causality between participation in global value chains (GVCs), renewable energy consumption and carbon dioxide (CO2) emissions throughout 1990–2015 for 172 countries. The results show that participation in GVCs negatively causes renewable energy consumption except for the Middle East and North America (MENA) and sub-Saharan Africa. Second, except for the Asia–Pacific region and globally, participation in GVCs has no causal impact on CO2 emissions, and participation in GVCs has a positive effect on CO2 emissions in the Asia–Pacific region and globally. Third, except for globally and sub-Saharan Africa, CO2 emissions have no causal impact on participation in GVCs; however, CO2 emissions hurt participation in GVCs globally and in the sub-Saharan African region. Forth, renewable energy consumption positively causes participation in GVCs in MENA, while renewable energy consumption does not cause participation in GVCs globally and in other regions. Fifth, there is no causality between CO2 emissions and renewable energy consumption both at the global and regional levels. Several policy implications are proposed and discussed for promoting participation in GVCs and improving the environment.

The phenomenal growth experienced by Turkey at the turn of the millennium is attributed in part to increased participation in global value chains. While participation in global value chains has been beneficial to the Turkish economy, it also poses unique environmental challenges. Consequently, this study focuses on shedding some light on the environmental externality of Turkey's participation in global value chains. This article examines the environmental effects of Turkey's participation in global value chains for the period 1990-2018, using a dynamic ARDL analysis. The study further compares the environmental effects of Turkey's backward and forward linkages into global value chains, so as to determine which contributes more to carbon emissions. The cointegration test results and dynamic ARDL simulations confirm the existence of a long-run relationship between the environment and global value chain participation. All measures of global value chain participation display a positive long-run impact on carbon emissions. The results also show that the polluting effect of backward and forward linkages into global value chains is not too different. The study finding suggests that Turkey is being assigned segments of the value chain that require dirtier production processes through incentives from global trade integration, thus making Turkey a pollution haven. It is concluded that this is because other countries continually source for inputs requiring dirty production processes from Turkey, as Turkey also exports final goods that are produced using eco-unfriendly techniques. Policymakers in Turkey therefore need to follow more environmentalist policies in the process of global value chain participation.

The relevance of the research is determined as Ukraine, a country with a developed manufacturing industry, opens up new opportunities and challenges in the context of the global economy, which is increasingly based on global value chains, and studying this impact is key to achieving economic growth and competitiveness. The study aims to examine the relationship between Ukraine’s participation in global value chains and the development of the manufacturing industry to identify opportunities and prospects for their interaction. The methods used were analytical, functional, system analysis, deduction, synthesis, and comparison. The results showed that industrial development is closely linked to changes in production, exports, and participation in global value chains, which affect production volumes and the number of employees in Ukrainian industries. The practical implications are to facilitate the development of better export strategies and improve sectoral policies to increase the competitiveness and efficiency of Ukrainian enterprises in global value chains.

The article considers the substantive characteristics of value chains, highlights the main objectives of the development of global value chains, as well as what is the basis of global economic networks. The definition of «networking» and «value chains» is given. Was highlighted the difference between value chains and network. Three main dimensions of product chains and networks are given – an input-output structure, a territoriality, a governance structure. The characteristics of different types of national economies are compared. The advantages of the network type of economy, the advantages of involvement in global value chains are given. The involvement of different countries in global value chains is shown (on the examples of post-Soviet countries and countries bordering Ukraine). Different industries and their indicators in value chains are characterized (in particular industry including construction, services, manufacturing). A correlation analysis of the impact of gross value added on economic indicators (Ukraine) has been developed (the following indicators were considered – gross value added at basic prices, individuals using the Internet, gross capital formation, wage and salaried workers total, inflation). The components of the countries united by a common network are determined. Compared global trends in value added by industry (manufacturing, services). Was determined which economic indicators have a positive impact on gross value added. Ukraine's participation in global value chains is characterized. Data on value added by production costs of enterprises by types of economic activity in Ukraine are given. Compared the value added of the manufacturing industry of Ukraine with other countries. The negative factors from participation in global value chains are given. It determined which economic indicators are affected by global value chains.

Integration within the EU single market increases the interconnection and interdependence of the EU economies. Global value chain (GVC) participation has become one of the most widely used indicators to measure the dispersion of the production process among different countries. The EU member states rate differently in the GVC participation index. The highest participation is in Luxembourg and Slovakia and the lowest is in Croatia. The aim of this paper is to identify the most important variables that influence the GVC participation index in the EU member states (EU-15 and EU new member states). The research employs dynamic panel data (GMM) methodology. The obtained results are very similar for the EU-15 and EU-NMS indicating that the most important drivers of GVC participation are: GDP growth, lag GVC participation, FDI, development of financial sector, share of services in GDP and share of high-tech products in export, and level of wages. However, the indicators and strength of the influence of some of these variables differ between the two groups of countries.

This research documents facts and offers an empirical appraisal of the contribution of trade in services for African participation in global value chains. It adopts a comparative approach among flows, service categories and positions in a global value chain, using data for a panel of 36 sub‐Saharan African countries from 2000 to 2017. The empirical analysis, using generalized method of moments in system, leads to three main results on the trade in services and global value chain nexus in Africa. First, the relationship is linear and positive. Secondly, exportations of services have a lower effect than importations of services, whatever the position in a global value chain. Thirdly, some services have a positive outcome on both backward and forward participation in global value chains, while others have a one‐sided effect. Those results give African countries tools to set a comprehensive and rationalized strategy to deepen and upgrade their participation in global value chains using trade in services.