MEASURING THE PARTICIPATION OF COUNTRIES IN GLOBAL VALUE CHAIN
Authors:   Research Center for Industrial Development Problems of the National Academy of Sciences of Ukraine, Pavlovska Iryna G. , Khaustova Viktoriia E. ,   Research Center for Industrial Development Problems of the National Academy of Sciences of Ukraine, Hubarieva Iryna O. ,   Research Center for Industrial Development Problems of the National Academy of Sciences of Ukraine
Published: November 2022

The article is devoted to the generalization and systematization of the main theoretical approaches and practical methods of measuring the participation of countries or industries in global value chains (GVC). The work provides the definition and main content of global value chains. It has been noted that the growing role of global value chains and their importance not only changes the approach to the ways of generating income and ensuring economic growth, but also gives an awareness that the most important driver of economic growth of an industry or country is direct participation in global value chains. Significant arguments have been presented in favor of the participation of countries in global value chains. Summarizing the existing methods of calculating the degree of a country’s participation in global value chains, the authors have singled out four index based methods: Index of Vertical Specialization, Export complexity index, GVC participation index and GVC position index. Index of Vertical Specialization assumes using data on the country’s expenditure-output for the distribution of the value of imported foreign goods contained in export products of a certain industry in this country, on the total export value of the industry. Export complexity index based on export volume and income of a country that participates in global value chains, as well as the export of goods of a specific country and the industry index of goods to measure the national product index. GVC participation index is measured in terms of the value of goods and services added as a result of trade. GVC position index shows the “status” of a certain industry in a country: the higher the value, the higher the “status” of a certain industry in the country’s global value chain, and vice versa. The main formulas for calculating indices, advantages and disadvantages of their use have been presented. Thus, it has been proven that the GVC participation index, which is based on the Index of Vertical Specialization, reflects the dynamics of the integration of countries in the GVC and allows for inter-country and inter-industry comparative analysis, but does not provide an opportunity to assess the benefits received from participation in the GVC. The use of the GVC Status Index allows to solve this task both at the country and at the sectoral level. It has been proposed to use GVC participation index and GVC position index as a basis for analyzing Ukraine’s participation in global value chains. This will allow not only to reveal the degree of Ukraine’s participation in the modern international division of labor but also, based on the conclusions of such an analysis, to develop recommendations for improving the place of Ukraine in the GVC and change the position of Ukraine from a raw material supplier country to a raw material processing country.