Doctor of Economics, Professor of the International Economic Relations Department of Kyiv National University of Trade and Economics
Assistant lecturer of the International Economic Relations Department of Kyiv National University of Trade and Economics
INTEGRATION OF NATIONAL ENTERPRISES INTO INTERNATIONAL PRODUCTION NETWORKS
Background. In recent decades, the role of international production networks has grown significantly. Individual country-members of IPN are increasingly faced with the inevitable decline in their domestic value added in exports, while other countries, on the contrary, increase the output, gross value added and, as a result, increase GDP and overall welfare of the country. The way in which countries are integrated into the IPN and the benefits they receive is greatly influenced by the determinants of industrial integration, which create opportunities for integration. Identification of these determinants is the aim of the study.
Materials and methods. Theoretical and methodological basis for analytical representation of the data represented in the article were the works of local and foreign scientists in the field of economics and international trade. The base of statistical information is data of State Statistics Service, as well as data of world organizations UNCTAD, OECD, WTO. This paper uses a wide range of general and special methods including: methods of analysis, synthesis and comparison; the historical, statistical and structural analysis, etc.
Results. A deep analysis of the determinants of industrial integration has been carried out. A conceptual approach was proposed. Its application makes it possible to determine the systemic effect of the determinants of industrial integration by calculating an index that takes into account the level of development of individual factors of production - the index of potential opportunities of integration to the IPN. The highest value of the index is in metallurgical industry (2.46), agriculture (1.99) and extractive industries (1.75). This confirms the raw material orientation of the domestic industry and indicates the underdevelopment of high-tech industries (branches producing computer and more sophisticated electronic products are of the smallest importance).
Conclusion. The key factors that promote or hinder active participation in the IPN and increase the value added were identified. As a result of calculating the index of potential opportunities for integration, it was revealed which types of economic activity in Ukraine have a greater potential for integration to the IPN. There are mostly raw material industries. In order to remedy this, it is important to develop a strategy for deepening participation in the IPN and change the integration vector towards high-tech industries with a higher level of value added.
Keywords: International production networks, the determinants of integration, factors of production, gross value added), foreign direct investment, innovation.
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