Identification of Global Value Chains Impact on Czech Manufacturing Industry

Identifying the impact of Global Value Chains (GVCs) is rather challenging as their activities go beyond national states while statistical monitoring is closed within national statistics. In addition, willingness of GVCs to provide information is limited. In order to map the influence of GVC we used the indirect method, with the help of three Input-Output (I-O) indicators of manufacturing industry in Czech Statistical Office (CSO) tables for years between 1990 and 2013. Purpose:The reason for writing thisarticle is the fact that there is a lot of talk about the influence of global value chains (GVC) on the economy of the Czech Republic, but there are few data analyses to support this debate. The aim of the article is to analyse the influence of GVC on manufacturing industry in the Czech Republic. Design/methodology/approach:In order to map the influence of GVC we used the indirect method (Ordinary Least Squares), with the help of three Input-Output (I-O) indicators in CSO tables: the import demand of exports, the share of added value in production and the total share of exports in resources. The sample is represented by all businesses in manufacturing industry in the Czech Republic. Through trends in the values of the indicators researched we verified the assumption that GVC put businesses in the territory of the Czech Republic into the assembly or production sector. Findings:We have ascertained that in the time period in question the share of businesses under foreign control in manufacturing industry increased from zero to the majority of production. The results show the suitability of our assumption, primarily in the case of the import demand of exports. The total share of exports in resources indicator proved to be generally appropriate. Using the share of added value in production can be recommended for identifying GVC less. Research/practical implications:The results show the consequences of involvement in GVC for individual sectors of manufacturing industry in the Czech Republic. They are a challenge for considering how to get optimally involved in GVC. A proposal for future research is to perform the calculations for all sectors in the Czech Republic and also for similar economies, such as Slovakia, Hungary, etc. Originality/value:Identifying the influence of GVC is fairly demanding, as their activities exceed the limits of national states, whereas statistical monitoring is closed as a part of national statistics. In addition, their willingness to provide information is limited. It is original analytical and data material that provides evidence of the influence of GVC on manufacturing industry in the Czech Republic.