The Competence Centre for International Economics Research (FIW) kindly invites to participate in the Seminar in International Economics on the topic
The Domestication of value chains. Can the Visegrád Group countries benefit from the Chinese experience?
Cracow University of Economics, Poland
Thursday, 30th of September 2021, 3:00 p.m. (CET)
The dial-in link will be sent immediately after registration.
The presentation is based on a discussion paper co-authored with Marcin Zawicki.
Developing countries sometimes deploy local content requirements (LCRs) with a view to strengthening the capacity of domestic firms for industrial upgrading. They induce foreign lead firms to intensify cooperation with local suppliers and transfer technological knowledge in the process. The literature underscores the ineffectiveness of LCRs, as the gains for local suppliers tend to be offset by losses for final producers and consumers, yet treating LCRs as an innovation policy instrument may alter these outcomes. Taking the Chinese LCR policy pursued in 2004‒2014 in the high-tech and medium-high-tech (HT&MHT) sectors as a starting point, we intend to consider whether or not it can be replicated by the Visegrád Group countries (or the V4, i.e. the Czech Republic, Hungary, Poland, Slovakia). Apart from natural for the EU ban on violating free trade rules, the benefits of such policy would not offset the negative effects of decreased share of foreign demand. The authors’ research hypothesis is that LCRs cannot actually become an effective tool of the V4’s economic policy. In order to test it, three auxiliary questions were formulated: (1) Did the application of LCRs contribute to value-added in the Chinese economy?; (2) What were the mechanisms of LCRs’ impact on value-added in Chinese HT&MHT sectors?; and (3) Can the V4 countries follow the Chinese development path?
The seminar series is organised by the Vienna Institute for International Economic Studies (wiiw) in co-operation with FIW, the Centre of Competence in International Economics. The seminar provides a forum for presentation and discussion of recent academic research in the field of international economics.