The emergence of global value chains leads to fragmentation of the production processes and reallocation of those processes across countries. With increasing number of production stages, the manufacturing process is located increasingly further away from the consumer. Literature suggests that fragmentation of production increases the international transmission of shocks. The global financial crisis is believed to lead to consolidation and shortening of global value chains and amplification of demand shocks along the global value chains, the so-called bullwhip effect. In this paper we study the effects of global financial crisis on employment, focusing specifically on the role of the distance from final demand (upstreamness) in this adjustment. We find that upstreamness matters for both labor demand and adjustment in employment during the periods of crisis, but this relationship is heterogeneous across countries. While the reaction to the crisis is indeed amplified further away from final demand, contrary to our expectations it is mostly channeled through lower job creation rates rather than faster job destruction. Moreover, the adverse effects of the crisis are lower in foreign firms, this difference does not depend on the distance from final demand.
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Globalne łańcuchy wartości | Global Value Chains
This website is devoted to the project "Global production chain: value added and productivity of entreprises", headed by Jan Hagemejer and financed by National Science Center
- The project is financed by the National Science Center NCN (grant number UMO-2013/09/D/HS4/01519).
- Project started in April 2014 and was completed by October 2016.
- The objective of the project is to assess how the presence of the economies of the Central and Eastern Europe including Poland in the global production precess affects the level and the growth rate of value added and GDP in the economy and the effectiveness of production processes.The baseline research hypothesis is that of increasing importance of globalization on the production processes in the economies of the CEEC.
- The project bridges several strands of economic literature: productivity effects of FDI, convergence, firm-level performance
- Data used in the project come from several sources the WIOD (the world input-output database) and the Amadeus database of firm-level financial indicators.
The objective of the proposed project is to assess how the presence of the economies of the CEECs including Poland in the global production process affects the level of value added in the economy and the effectiveness of production processes.The baseline research hypothesis is that of increasing importance of globalization on the production processes in the economies of the CEECs. The supporting hypotheses are:
The structure of international trade of Poland and the CEEC has changed over the recent two decades. The importance of both imports and exports of intermediate goods has increased. The output of export-intensive industries, which is believed to be the major growth driver in these economies, is to a larger and larger extent dependent on the imports of intermediate goods. As these imports usually contain a considerable share of value added, the content of domestic value added in exports is usually largely overestimated.
The multinationals and other foreign-owned enterprises are more productive than their domestic counterparts. The productivity premium is expected to be higher for the sectors that are more intensively involved in the global value chain (a high content of foreign value added in exports, a high share of intermediates imports) due to technology diffusion and learning within the structure of multinationals. There are also sizeable spillover effects that involve technology adoption by domestic entreprises and they lead to productivity improvements. These effects are associated with the intensity of sectoral international trade, in particular trade in value added in global production chains.
The proposed analysis will make it possible to answer the following research questions:
- Does the relative position in the global value chain affect the process of technology spillovers?
- Does a high share of domestic value added in exports is a requirement for large domestic gains from international trade?
@Inbook{Hagemejer2017,
author="Hagemejer, Jan and Tyrowicz, Joanna",
editor="Havlik, Peter and Iwasaki, Ichiro",
title="Upstreamness of Employment and Global Financial Crisis in Poland: The Role of Position in Global Value Chains",
bookTitle="Economics of European Crises and Emerging Markets",
year="2017",
publisher="Springer Singapore",
pages="217--236",
isbn="978-981-10-5233-0",
}