integration into global value chains
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Integration into Global Value ChainsPolicy Discussion
Cagatay Bircan
European Bank for Reconstruction and Development
7th CompNet Workshop, Frankfurt, 12-13 December 2013
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Policy ImplicationsMade in China: How Much Does It Affect Measures of Competitiveness?
I Competitiveness should be measured in value added terms.
I Non-price factors (e.g. quality and taste) should beaccounted for.
I Retain high quality intermediates production in developedeconomies.
I Future research:
I Disaggregated data on services trade.I How do we improve the quality of domestic production?
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Policy ImplicationsThe Competitiveness of the European Automotive Industry
I Need for diversification of competitors.
I But maintain intra-EU competition to retain GVC incomein Europe.
I Eastern Europe should emulate Western Europe inincreasing value added...
I ... and generating more income/jobs from existing GVCs.
I Integration with China is welcome.
I Import competition from China accounts for 27% (48%) ofthe total observed increase - within and between firms - inthe share of non-production (highly educated) workers inlow-tech Belgian manufacturing (Mion and Zhu, 2013).
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Policy ImplicationsTradable vs. Non-tradable: An Empirical Approach to the Classification of Sectors
I Need for a trade-weighted approach for measuring (non-)tradables.
I Delivers a continuous measure.I Takes into account import content.
I Future research:
I More disaggregation of services.I How do we classify these disaggregated services?
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Future Research
I Global production gradually shifting toward developingcountries.
I Any room for SME development in both North and South?I How do we increase value added in South (e.g. skills,
R&D)?I Impact on consumer welfare?
I Policy support to answer two questions first:
I What exactly are the benefits (externalities) of locating in acertain location and not elsewhere?
I What is the cost effectiveness of policy to induce thisoutcome?
I Need to answer market failures: e.g. linkages, R&Dspillovers, best practices.
I Regional support versus industry support?
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Externalities Waiting To Be Internalised?
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The Case of SlovakiaDevelopment of other sectors
Source: EBRD
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The Case of RussiaImportance of clusters
Source: EBRD
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The Case of TurkeyImportance of clusters and proximity to Europe
Source: EBRD