KEY FACTORS FOR ENGAGEMENT IN GLOBAL VALUE CHAIN
Abstract
The article characterizes the key factors for a country's engagement in global value chains (GVCs). It is argued that under the conditions of deglobalization at the current stage, which is accompanied by reindustrialization, reshoring, and the strengthening of protectionist measures, integration into the world economy remains an objective reality. One of the paths to integration is participation in GVCs, as a guarantee of sustainable long-term economic growth. An analysis of conceptual approaches to GVCs has been carried out, and the main directions of theoretical research, methods, and channels of engagement have been identified. A classification of the factors of a country's participation in GVCs has been made, noting both global and national factors, which can vary over time and depending on the industry. Among the global factors, international institutions and the removal of trade barriers are identified as key. Factors related to national characteristics include the presence of natural mineral resources, production and innovation potential, skilled labor force, infrastructure both in terms of transportation and logistics, and effective formal and informal institutions. It is noted that one of the factors is the goal of engagement, which is determined according to the assessment of the benefits and threats of participating in GVCs, which can be different for countries forming the links of GVCs, typically developed countries, and those hosting GVCs links on their territory, typically developing countries. Based on the groups mentioned, a characterization of possible benefits and threats is provided. This involvement also signifies the evolving dynamics of international trade and economics, emphasizing the need for adaptive strategies and policies to optimize the benefits of GVCs participation while mitigating its risks. The dynamic landscape of global trade demands continuous innovation and flexibility from nations, urging them to adapt to the ever-changing requirements of GVCs. Moreover, technological advancements and digitalization play crucial roles in shaping the future of GVCs, enabling more efficient and resilient supply chains. Countries must, therefore, leverage these technologies to enhance their participation and value in GVCs, fostering economic resilience and growth.
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