Global value chains and their impact on Ukraine’s agro-industrial complex

Valerii Mytsenko, Iryna Babets, Ivan Mytsenko, Olena Sokolovska and Daria Nasypaiko

Ekonomika, Journal for Economic Theory and Practice and Social Issues, 2024, vol. 31, issue 4

Abstract: In the contemporary global economic environment, integration into global value chains is a crucial factor for a country’s economic growth. The aim of this research was to determine the impact of Ukraine’s participation in global value chains on the country’s agro-industrial complex. The study employed statistical analysis, regression analysis, econometric modelling, correlation analysis, and analysis of indices of a country’s participation and position in global value chains. It was established that during 2010-2011, the Ukrainian economy demonstrated high growth rates of gross domestic product and exports due to the growth of foreign value-added. Starting in 2012, growth rates began to decline due to economic crises, political instability, and the war that began in 2014. The COVID-19 pandemic also had a negative impact on the economic situation in 2020. Despite the full- scale war in 2022, a slow economic recovery was observed in 2023, driven by an increase in foreign gross value- added in exports. Regression analysis showed a strong correlation between Ukraine’s gross domestic product and indicators of foreign investment in exports and total exports. It was found that an increase in foreign gross value- added in exports has a negative impact on gross domestic product, while an increase in total exports has a positive impact on economic growth. Despite the complexity of the global value chain system, the results indicate Ukraine’s potential for further integration into global economic processes. It has been found that the agricultural sector is also affected by fluctuations in foreign gross value-added, which is reflected in the productivity and export capabilities of the agricultural sector. An analysis of the participation of key industries, including the agro-industrial complex, in GVCparticipation has shown a trend towards a decrease in the share of foreign value-added in the gross export of industrial products, indicating an increase in domestic value-added. The research results can be used to develop an effective strategy for Ukraine’s economic development by optimising participation in global value chains and reducing dependence on foreign value-added in exports

Keywords: Supply; Chain (search for similar items in EconPapers)
Date: 2024
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