Tracing Value Added and Job Creation across Industries in the Slovak Republic

Ďurčová, Júlia and Mirdala, Rajmund (2017): Tracing Value Added and Job Creation across Industries in the Slovak Republic. Published in: Journal of Applied Economic Sciences , Vol. 12, No. 5 (October 2017): pp. 1285-1300.

Abstract

Increasing participation of the Slovak republic in the global value chains (GVCs) represents one of the key implications of the steadily growing position of important Slovak industries in both domestic and international terms. Slovak Republic is mainly positioned in the downstream activities of GVCs. However, his fact contributes to the relatively limited domestic value added creation. The aim of this article is to analyze whether the changes and the increasing participation of the Slovak republic in the GVCs influenced the position of important industries in term of value added creation and employment. We analyze the multipliers of production and value added using input-output model. The factors of skill structure of labor demand will be estimated using the system of cost share equations derived from translog cost function. The data covers period 2000-2014 and 1995-2009 for socio-economic analyses and come from World Input-Output Database (WIOD). The results for two analyzed industries show that their impact on total industrial production has decreased during the analyzed period. The results for employment analysis clearly revealed the differences between domestic and foreign orientated industry.

• Item Type: MPRA Paper
• Language: English
• Keywords: value added, employment, multipliers, GVCs, offshoring, labor demand, input-output model, translog cost function
• Subjects: F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials

References

BACKER, K., MIROUDOT, S. (2014) Mapping Global Value Chains. [ECB Working Paper No. 1677/2014], Frankfurt am Main, European Central Bank, 40 p. Available at: https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1677.pdf

BALDWIN, R., LOPEZ-GONZALES, J. (2013) Supply-Chain Trade: A Portrait of Global Patterns and Several Testable Hypotheses. [NBER Working Paper, no. 18957], Cambridge, National Bureau of Economic Research, 39 p. Available at: http://www.nber.org/papers/w18957.pdf

BALOG, M. et al. (2013) Inovatívne Slovensko - východiská a výzvy. Slovenská energetická a inovačná agentúra, Bratislava. ISBN 978-80-88823-55-1 Available at: https://www.siea.sk/materials/files/inovacie/publikacie/publikacia_Inovativne_Slovensko_vychodiska_a_vyzvy_SIEA.pdf

BERNDT, E., WOOD, D. (1975) Technology, Prices and the Derived Demand for Energy, The Review of Economics and Statistics, 57(3): 259-268. Available at: http://www.aae.wisc.edu/aae705/References/Berndt.pdf

CARDENETE, M. A. and SANCHO, F. (2006) Missing Links in Key Sector Anaysis. Economic Systems Research. Available at: https://www.iioa.org/conferences/15th/pdf/cardenete_sancho.pdf

COSTINOT, A., VOGEL, J., and WANG, S. (2013) An Elementary Theory of Global Supply Chains. Review of Economic Studies (2013) 80, pp. 109–144

DUJAVA, D., LÁBAJ, M., WORKIE TIRUNEH, M. (2011) Štruktúra ekonomiky a ekonomický rast: Ako naplniť teóriu číslami. Bratislava: Iris, 2011. 269 s. ISBN 978-80-89256-66-2

DUJAVOVA, L. (2014) The Use of Multipliers for the Quantification of the Volume of Domestic Production Initiated by the Expenditure of Visitors in the Travel and Tourism. Trendy v podnikání, 55(1): 55-63. Available at: http://www.fek.zcu.cz/tvp/doc/akt/tvp-1-2015-clanek-6.pdf

EKHOLM, K., and HAKKALA, K. (2005) The Effect of Offshoring on Labour Demand: Evidence from Sweden. [RIIE Working Paper, no. 654], Stockholm, The Research Institute of Industrial Economics, 36 p. Available at: http://www.ifn.se/Wfiles/wp/WP654.pdf

FEENSTRA, R.C., and HONG, Ch. (2007) China’s Exports and Employment, [NBER Working Paper, no. 13552], Cambridge, National Bureau of Economic Research, 39 p. Available at: http://www.nber.org/papers/w13552.pdf

FOSTER-MCGREGOR N., STEHRER R., DE VRIES G.J. (2013) Offshoring and the Skill Structure of Labor Demand, Review of World Economics, 149(4): 631-662. Available at: http://dx.doi.org/10.1007/s10290-013-0163-4

GAŠPARÍKOVÁ, J., NEMCOVÁ, E., PÁLENÍK, M. (2006) The impact of Manufacturing Branches on Regional Differentiation of Employment in the Slovak Republic. Journal of Economics (Ekonomický časopis), (54)3: 266-280. ISSN 0013-3035

GROSSMAN, G., ROSSI-HANSBERG E. (2008) Trading Tasks: A Simple Theory of Offshoring American. Economic Review, 98(5): 1978-1997

HABRMAN, M. (2013) Impact of Export on Value Added and Employment in Slovak Economy. [EÚ SAV Working Paper, no. 53], Bratislava, Institute of Economic Research, Slovak Academy of Sciences. ISSN 1337-5598. Available at: http://www.ekonom.sav.sk/uploads/journals/239_wp_53_habrman.pdf

HABRMAN, M., KOČIŠOVÁ, M., LÁBAJ, M. 2013. Štruktúrne súvislosti slovenskej ekonomiky v roku 2008. New Economy (Nová ekonomika), 6(2): 40 - 51

HEČKOVÁ, J., CHAPČÁKOVÁ, A. (2011) Competitiveness of the Branch Structure of Slovak Manufacturing Industry in 1998-2008. Journal of Economics (Ekonomický časopis), 59(1): 59-78. ISSN 0013-3035

HERTVELDT, B., MICHEL, B. (2013) Offshoring and the Skill Structure of Labour Demand in Belgium, De Economist (2013) 161:399-420. Available at: https://link.springer.com/content/pdf/10.1007%2Fs10645-013-9218-0.pdf

HIJZEN, A., SWAIM, P. (2007) Does Offshoring Reduce Industry Employment? National Institute Economic Review, 201: 86-96. Available at: http://www.jstor.org/stable/23879219

HUDEC, O., ŠEBOVÁ, M. (2012) The ICT Sector Evolution in an Industrial Region of Slovakia. Journal of Economics (Ekonomický časopis), 60(1): 65-82. ISSN 0013-3035

JOHNSON, R. C. (2014) Five Facts about Value-Added Exports and Implications for Macroeconomics and Trade Research. Journal of Economic Perspectives, 28(2): 119–142

JOHNSON, R.C., NOGUERA, G. (2012) Fragmentation and Trade in Value Added over Four Decades. [NBER Working Paper, no. 18186], Cambridge, National Bureau of Economic Research, 61 p. Available at: http://www.nber.org/papers/w18186.pdf

KOOPMAN, R., WANG, Z., WEI, S. J. (2014) Tracing Value-Added and Double Counting. American Economic Review, 104(2): 459-494

KUBALA, J., LÁBAJ, M., SILANIČ, P. (2010) Structural Linkages in the Slovak Economy in 2010: Identification of Key Sectors. Journal of Economics (Ekonomický časopis), 63(8): 795-816. ISSN 0013-3035

LÁBAJ, M. (2014) Štrukturálne aspekty ekonomického rozvoja – Slovenská ekonomika v globálnych súvislostiach. EÚ SAV Bratislav. ISBN 978-80-7144-223-3. Available at: http://www.ekonom.sav.sk/uploads/journals/255_labaj-monografia-2.pdf

LÁBAJ, M. (2013) Development of the Slovak Economy in 2008 and 2009 from the Perspective of Input-Output Analysis. Journal of Economics (Ekonomický časopis), 61(10): 994-1010. ISSN 0013-3035

LÁBAJ, M., LUPTÁČIK, M., RUMPELOVÁ, D. (2008) Structural Interdependencies in the Slovak Economy Based on Input-output Analysis. Journal of Economics (Ekonomický časopis), 56(5): 477-494. ISSN 0013-3035

LOS B., TIMMER, M., and DE VRIES G.J. (2015) How Important are Exports for Job Growth in China? A Demand Side Analysis, Journal of Comparative Economics, 43(1): 19-32. Online: http://dx.doi.org/10.1016/j.jce.2014.11.007

LUPTÁČIK, M. et al. (2013) Národohospodársky význam automobilového priemyslu pre slovenskú ekonomiku. Bratislava: Ekonomická univerzita v Bratislave, Katedra hospodárskej informatiky. Available at: https://www.researchgate.net/profile/Stefan_Rehak2/publication/266616701_Narodohospodarsky_vyznam_automobiloveho_priemyslu_na_Slovensku_Empiricke_vysledky/links/54358add0cf2dc341db2b2b5.pdf

MHSR. (2013) Research and Innovation Strategy for Smart Specialisation of the Slovak Republic. Available at: http://www.eu2020.gov.sk/data/files/4664_ris3_1311_en.doc

MICHAELS, G., NATRAJ, A., VAN REENEN, J. (2014) Has ICT polarized skill demand? Evidence from eleven countries over 25 years. Review of Economics and Statistics, 96(1): 60-77

OECD (2013) Slovak Republic Fostering an Inclusive Job-Rich Recovery. In Series: Better Policy Series. April 2013. Available at: http://www.oecd.org/publications/slovak-republic-fostering-an-inclusive-job-rich-recovery-9789264201637-en.htm

SLUŠNÁ, Ľ., BALOG, M., et al. (2015) Automobilový priemysel na Slovensku a globálne hodnotové reťazce. Slovenská inovačná a energetická agentúra, Bratislava 2015, ISBN 978-80-88823-60-5 Available at: https://www.siea.sk/materials/files/inovacie/publikacie/studia_Automobilovy_priemysel_na_Slovensku_a_globalne_hodnotove_retazce_SIEA_web.pdf

VRH, N. (2015) Pay-off to Participation in Global Value Chains: How Much are New EU Member States Lagging behind the Rest of EU Countries in Terms of Domestic Value Added in Exports? Economic and Social Development: Book of Proceedings, Varazdin, Faculty of Economics. University of Ljubljana, p. 592-601.