Up or Down the Value Chain? A Comparative Analysis of the GVC Position of the Economies of the New EU Member States

Abstract

The pattern of trade of the Central and Eastern European countries has been changing since the beginning of the economic transition in the early 1990s. By the end of the century this process was additionally strengthened by their integration with the European Union and overlapped with the development of global value chains (GVC) spanning across Europe with which the new member states (NMS) have become increasingly integrated.In this paper, we shed light on these changes by analysing the position of the NMS within the global value chains. We employ the upstreamness measure proposed by Antràs et al. (2012) and use the World Input–Output Database. Although we observe a global increasing trend in the upstreamness of all countries, we find that the NMS have in many cases gone against this trend while converging in their production structure within their group and with the EU-15. This convergence is mostly observed in Czech Republic, Hungary, Poland and Slovakia where the level of upstreamness in the most important exporting sectors was close to that of Germany by the end of the analysed period 1995−2011.