POSITIONING OF CENTRAL EUROPEAN COUNTRIES IN GLOBAL VALUE CHAINS IN THE CONTEXT OF UKRAINE’S EUROPEAN INTEGRATION

Abstract

In the article, the positioning of Central European and Baltic countries (CEB) in global value chains and their comparison with Ukraine is carried out, which should help in formulating the future strategy of effective integration of the Ukrainian economy into European value chains. Economic and statistical methods, including elements of regression and graphical analysis, made it possible to group CEB countries according to the level of their economic development and GVC participation, as well as GVC position. It was found that all the considered countries are characterized by a negative position in global value chains. It was established that almost all the countries of Central Europe and the Baltics can be divided into two groups: 1) economies with a higher-than-average relative GVC participation and a lower-than-average-GVC position (Czechia, Slovakia, Hungary, Slovenia, Estonia); 2) economies with a lower-than-average relative GVC participation and a higher-than-average GVC position (Poland, Latvia, Lithuania, Croatia, Romania, as well as Ukraine). It has been proven that in the considered countries the intensity of GVC participation and GVC position are not directly related to the achieved level of economic development, however, it is necessary to take into account the degree of development of the national innovation system as an important factor of economic growth. Highly integrated in GVC countries with higher-than-average GDP PPP per capita: Czechia, Estonia and Slovenia, are characterized by the high level of innovation development as well. It was emphasized, that the low share of final goods in the commodity export is a main characteristic, which differs Ukraine from all the CEB countries and poses a serious threat to its further economic development. It is proposed to pay attention to the economic model of Poland as a possible strategic reference point for the successful integration of the Ukrainian economy into European value chains: in terms of balancing export-led growth model with the development of domestic market and nurturing institutions for the successful economic development.