The role of foreign value added in creating Poland's comparative advantage in world merchandise exports

Tomasz Białowąs, Monika Wojtas

Abstract


The paper deals with changing approach to measuring trade an competitiveness due to the widely spread process of international fragmentation of production process which makes it much more difficult to assess origin of products in international trade. Therefore a method was developed to use foreign and domestic value added in order to evaluate country's role in world trade as well as its comparative advantage. Authors apply this methodology to Polish trade in goods in 1995-2009 and reveal that for- eign components were an important part of its exports. Poland was highly dependent on foreign value added from European Union countries, especially Germany. Sectors with highest shares were: transport equipment, electrical and optical equipment, basic metals and fabricated metal products, chemicals and non-metallic mineral products. Foreign value added also affected Poland's comparative advantage - its impact on various industries was adverse. In some cases it improved RCA indexes while in others using domestic value added for the calculations resulted in a larger comparative advantage.

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References


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DOI: http://dx.doi.org/10.17951/h.2014.48.2.31
Date of publication: 2015-05-23 20:20:34
Date of submission: 2015-04-16 13:30:55


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