2nd ICAI 2022

International Conference on Automotive Industry 2022

Mladá Boleslav, Czech Republic

Figure 3: The change and the structure of backward and forward participation

Note: Pat_b = backward participation; Pat_f = forward participation; simple = semi-final product crossing the border only one time and used by the importer for final expenditure; complex = semi-final product crossing border more than one time either as a re-export that returns or as an export that gets for final use in a third country. The left axis measures the GVC elements, the right one reflects the overall (GVC_pat) lines. Source: own elaboration by UIBE The global value chain length measures the average number of production phases weighted by the relative value-added contribution, from primary inputs to final products. By the nature of the activity the whole process contains domestic chains plus simple and complex value stages as well as the traditional trade of the final product. Since we differentiate the above types and parts, we can make conclusions to the position of the automotive industries of the two countries, too. Our figures indicate that the length of the motor vehicle international production is longer as well as more even and stable in Czechia. In Hungary the backward part shrunk, it has a volatile nature while the forward part of the length extended. As a consequence, the Hungarian automotive industry shifted towards upstream position. The Czech figures present a slight increase in both the backward and forward cases; however, the former has a stronger dynamic and hence the Czech automotive industry relatively shifted to a downstream position. The ratios of the different length parts reflect stability in time, though the structures are different. The GVC stages are the dominant parts in all cases but have a higher ratio in the forward length. In accordance with the former analysis the domestic stages are longer as well as the traditional final product trade part is stronger in the Czech case. The Czech automotive industry length is outstanding in international comparison too; in addition, the backward stages and hence the downstream characteristics are relatively strong.

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