Dynamics of GVC Position of v4 Automotive Suppliers: Implications for Public Policy

Abstract

In the post-covid world, governments explore options to enhance their policies so that corporations can act as successful motors of recovery and sustainable growth. Countries select various objectives related to global value chains (GVC), such as participation, value capture, inclusiveness, and resilience, yet might be unaware of the position of corporations they are supposed to motivate. In this paper, we aim to (re-)investigate the position of Visegrad Four (V4) suppliers within the regional automotive value chains and to compare results with suppliers in other EU member states using the trade in value-added (TiVA) statistics. We set two research questions: How does the position of V4 in automotive GVCs differ from the positions of other EU member states and significant other automotive producing countries? What is the link between the domestic value-added in gross exports of final automotive products and the selected policy variables? A multiple linear regression model is run with TiVA in the automotive industry as the dependent variable and independent variables embodying proxies of GVC-oriented policy consequences. The analysis determined significant differences in value-added levels between V4 countries and other EU countries, and other large automotive-producing economies. The labour cost, productivity, investment in R&D, and innovation support are among the factors where V4 countries fall behind. Implications for Central European audience: The results of our research might be helpful for respective authorities and governments in V4 and other Central and Eastern European countries. They can be of use when setting the goals of and implementing policies targeted at promoting innovation, upgrading within existing GVCs, and the cooperation between universities and research centres on the one hand and the automotive industry on the other.