Integration of Ukraine to the Global Value Chains

Abstract

The article considers the theoretical and methodological approaches to global value chains when measuring international trade. Global trends in the modern development of international trade are analysed, and the main challenges of international trade policy for Ukraine are characterised. It is established that the modern structure of the Ukrainian economy was formed under the influence of external factors. The authors propose that, over time, the influence of the global economy on the dynamics and structure of the Ukrainian economy will continually intensify. The prospects of Ukraine’s integration into global value chains are examined, and the authors found that the structure of Ukrainian exports of goods coincides with the structure of world exports only partially. Ukrainian export of goods is characterised by a low share of highly processed industrial products and a high share of low value‑added products, in particular, basic metals and agriculture and food industry products. The export of domestic high‑tech goods is constantly decreasing compared to developed countries, and its share in the world export of high‑tech goods is insignificant. To ensure the acceleration of GDP growth in Ukraine, it is important not only to increase exports, but also to increase the export of high‑tech goods.

Full text

Comparave Economic Research. Central and Eastern Europe
Volume 25, Number 2, 2022
hps://doi.org/10.18778/1508‑2008.25.17
Integraon of Ukraine to the Global
Value Chains
Vitalii Venger hps://orcid.org/0000‑0003‑1018‑0909
Sc.D., Senior Researcher at the State Instuon “Instute for Economics
and Forecasng of Naonal Academy of Sciences of Ukraine”, Kyiv, Ukraine
e‑mail: vengerv@ukr.net
Nataliia Romanovska hps://orcid.org/0000‑0002‑1377‑7551
Ph.D., Associate Professor at the State Instuon “Instute for Economics
and Forecasng of Naonal Academy of Sciences of Ukraine”, Kyiv, Ukraine
e‑mail: romnatalina@gmail.com
Maryna Chyzhevska hps://orcid.org/0000‑0003‑1637‑9564
Ph.D., Chairman of the Department for Economic Theory and Economic
Cybernecs at Naonal University “Yuri Kondratyuk Poltava Polytechnic”
Poltava, Ukraine, e‑mail: marn.poltava@gmail.com
Abstract
The arcle considers the theorecal and methodological approaches to global val‑
ue chains when measuring internaonal trade. Global trends in the modern devel‑
opment of internaonal trade are analysed, and the main challenges of internaonal
trade policy for Ukraine are characterised. It is established that the modern structure
of the Ukrainian economy was formed under the inuence of external factors. The au‑
thors propose that, over me, the inuence of the global economy on the dynam‑
ics and structure of the Ukrainian economy will connually intensify. The prospects
of Ukraine’s integraon into global value chains are examined, and the authors found
that the structure of Ukrainian exports of goods coincides with the structure of world
exports only parally. Ukrainian export of goods is characterised by a low share
of highly processed industrial products and a high share of low value‑added prod‑
ucts, in parcular, basic metals and agriculture and food industry products. The export
of domesc high‑tech goods is constantly decreasing compared to developed coun‑
tries, and its share in the world export of high‑tech goods is insignicant. To ensure
the acceleraon of GDP growth in Ukraine, it is important not only to increase ex‑
ports, but also to increase the export of high‑tech goods.

138
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
Keywords: internaonal trade, integraon, global value chains, export, import,
high‑tech goods
JEL: F15, F20, F29
Introducon
echaracteristic feature ofthestage ofdevelopment ofthecurrent world economy
is theexistence ofglobal production chains, which are theinternational trade inin‑
termediate goods. Aglobal value chain (GVC) is asequence ofinterrelated types
ofactivities onadded value creation, located onatleast two continents, or within two
trading blocks, ensuring theproduction ofagood or aservice, from theidea forits
creation toits delivery tothenal consumer (Antras 2020; Yaroshuk andOchrimen‑
ko 2020).
Global trade increasingly includes exports ofparts, components, subsystems andser‑
vices within theGVC andits associated production networks.is has led toagrow‑
ing specialisation ofcompanies related tospecic tasks when producing nal goods
andservices andan increase ininternational trade between dierent industry sectors.
ere has also been adramatic increase intheinternational movement ofgoods be‑
tween dierent structures oftransnational corporations as aresult ofan active detailed,
nodal distribution oflabour. Consequently, this process has triggered rapid develop‑
ment ininternational production andsupply chains. Undoubtedly, GVC is apositive
product ofglobalisation, as it allows almost all countries tobe included intheglobal
economy, inturn, contributing totheir socio‑economic development.
As production systems become decentralised, fragmented andmore specialised,
new market opportunities arise forall types ofcompanies, including small andme‑
dium‑sized enterprises, toenter global markets andshi toexport activity. It is more
ecient through thespecialisation.
GVCs provide signicant opportunities forcountries toexpand exports. ey allow
enterprises toconcentrate onspecic components or activities where they have acom‑
petitive advantage, such as low cost or high quality. ey can also develop andim‑
plement eective strategies forprocessing raw materials where they are already com‑
petitive. is could include processing cotton intotextile yarn, fabric intoclothing,
round wood intofurniture products, or supplying certain agricultural raw materials
or semi‑nished products. ere are, therefore, many opportunities forco‑operation
– one has toknow how tond them andoccupy aniche inthemarket.
Within theGVC, higher‑level buyers can provide access toknow‑how intechnology,
management, marketing, intermediate resources, andloans. However, tobe competi‑
tive intheworld ofinternational business, enterprises must change theconcept oftheir
development andbase it primarily ontheeciency oftheentire GVC, i.e., themain
goal oftheir activities should be toachieve systemic eciency, not only their own.

139
Integraon of Ukraine to the Global Value Chains
us, theconcept ofaglobal value chain, based ontheconcept ofvalue added,1 al‑
lows us toresearch thedierent sectors oftheworld economy, studying their structure
andthedynamics ofparticipation ofvarious economic entities involved inthepro‑
duction process. is approach is auseful tool foranalysing global economic trends,
as it allows us totrack all thelinks between thedierent parts ofgeographically frag‑
mented international production, determine therole ofeach participant andpredict
theconsequences foragiven country.
Both developed anddeveloping countries participate inGVC. However, their level
ofinvolvement, positions inthestages oftheproduction processes, thenature ofac‑
tivities andrelationships with theother participants inGVC can dier signicantly.
Akey role inorganising fragmented international production is played by transna‑
tional corporations, whose countries oforigin are mainly developed. When locating
thedistinct stages oftheproduction process indierent countries, they gain certain
advantages due tothelocal dierences inproduction costs, infrastructure, market‑
ing, logistics, trade andinvestment regimes, andso on. Participating inGVCs can
have both positive andnegative eects fortherecipient countries. It is ofparticular
importance fortheleast developed countries, where eective involvement inglobal
production processes is aprerequisite fornational economic growth andovercoming
unemployment andpoverty. erefore, it is vital forall countries toresearch theGVC
andidentify theprospects forparticipation inthem. It is ofparticular importance
fordeveloping thecountries’ own economic strategy.
is article aims toprovide asystematic analysis oftrade activities andaration‑
ale forpromising areas tofacilitate theintegration ofUkraine’s high‑tech industries
intoglobal value chains.
etheoretical andmethodological basis oftheresearch consists ofscientic work
andmethodological research ofleading Ukrainian andforeign scientists. eresearch
onscientic problems related toUkraine’s integration intoglobal value chains was con‑
ducted using critical andscientic analysis, methods ofscientic generalisation andsys‑
tematisation, mathematical statistics andgraphical tools, andanalysis oftheUkrain‑
ian andinternational external economic activity dynamics. eresults, conclusions
andrecommendations are substantiated based onan integrated approach.
Theorecal concepts for measuring global value chains
in internaonal trade
econcept ofthevalue chain was introduced by Porter inthecontext ofthecompet‑
itive advantages research. His fundamental works (Porter 1985, 1990) provide two im‑
portant principles forthevalue chain concept. First, it distinguishes between thestag‑
1
Value added is the value that the rm has added to the purchased raw materials and materials with
its factors of producon, i.e., it is the rm’s net contribuon to the creaon of the commodity.

140
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
es oftheproduction process, inparticular, input logistics forsupply, theactivities
oftherm, output logistics, andsales andauxiliary services. Secondly, he investigat‑
ed how value is created inamultiple links system (Porter 1990). From these two per‑
spectives, Porter lays down thebasic theory, which explains why certain enterprises
are ecient. Inhis view, theperformance ofenterprises depends onhow they manage
their delivery links, how they are included intheoverall structure ofthevalue chain,
andhow well they are organised andable tomaintain competitiveness intheentire
chain. Consequently, thedevelopment ofan enterprise andan industry is determined
by, among other factors, theindustrial structure andorganisation.
Based onempirical research inthegarment, footwear andautomotive industries,
Gere et al. (2001) developed theconcept ofglobal value chains. ey paid attention
tothevalue chain governance structures andtheconditions forsuppliers toparticipate
andmodernise their industries as value chains become more open totrade andfor‑
eign direct investment. Modernisation methods include product modernisation, pro‑
cess modernisation, functional modernisation andcross‑sectoral modernisation. One
ofthemain arguments oen put forward indiscussions about theGVC is that cer‑
tain global players are powerful enough toimpose contractual terms. Suppliers whose
products are easier toproduce or whom major buyers can substitute, andproducers
who depend onsuppliers ofcomplex modern resources andtechnologies that are dif‑
cult tobuy abroad, are generally forced toaccept theimposed contractual terms.
Consequently, themajor players maintain agreater share ofthevalue added through
ownership ofwell‑established brands, proprietary technologies, or access toexclusive
information invarious raw material andproduct markets.
Freeman (1987) andNelson andWinter (1982) demonstrated that thecompetitive‑
ness ofanational industry is based onthestructure andeciency indicators ofna‑
tional innovation systems. Striking examples include theautomotive andinformation
technology industries inJapan (Freeman 1987). eapproach based oninnovation
systems is not directly related tothestudy ofvalue chains. Nevertheless, it assumes
that access toknowledge andtechnology, andthus systemic competitiveness, depends
onenterprises’ access toinnovation, andaccordingly ontheengagement ofactors
invalue chains, which entails technological modernisation, research, development
andtraining. ose who cannot keep up with thetechnological developments can
benet from theinvestments ofprevious innovators, copying, adapting andimprov‑
ing innovations fortheir own purposes.
Auseful theoretical analysis oftheformation ofglobal value chains is considered
intheworks ofAntràs, Garicano, andRossi‑Hansberg (2008), andothers. Grossman
andRossi‑Hansberg (2012) suggested theterm “trade intasks”, which characterises
thedistribution ofproduction functions intoseparate pieces. ey created themodel
ofafragmented production where every country fulls one function intheproduc‑
tion andsale ofthegood.
An important problem inkeeping track ofeconomic statistics is assessing thecon‑
tribution ofeach country’s value added tothetotal value added ininternational trade

141
Integraon of Ukraine to the Global Value Chains
ows. As experts argue, international trade statistics today most oen provide adis‑
torted picture oftrade’s impact ontheeconomy: “...what you see is not what you get”.
is is related totheglobalisation ofproduction andreects that thevalue ofprod‑
ucts that cross borders several times forfurther processing is accordingly being ac‑
counted several times (Maurer andDegain 2010). UNCTAD estimates that about
28%ofworld exports are intermediate goods that have been included several times
inthevalue ofexports atdierent stages ofproduction indierent countries. is
problem, inturn, generates new problems, namely that it is impossible toestimate real
imbalances intrade between countries, real exchange rates, andtomake arealistic
assessment ofother important international trade indicators andaspects ofinterna‑
tional economic relations. Forthis reason, research intothemeasurement ofglobal
value chains ininternational trade is being carried out today mainly intwo directions:
1)“cleaning up” thetrade statistics from double counting, isolating value added ows;
2) decomposing theaggregate trade ows intocomponents according tothenational
origin andpurpose ofvalue added (Motorin andPrychodko 2015).
efragmentation ofproduction processes through international co‑operation
has led totheemergence ofborderless production systems. ey exist intheform
ofsequential chains or complex networks, which can be global, regional or involving
only two countries. Because ofthis, an objective question arises, as tohow toisolate
thecontribution ofeach country involved intheproduction ofvalue‑added products.
ere are three main approaches toaddress this task. erst is based onthefact
that research is conducted either onspecic products or onindividual export‑orient‑
ed enterprises. However, when using this approach intheresearch process, it is di‑
cult totrace theentire chain ofintermediate suppliers. esecond approach is based
onestimating theinternational trade ingoods ofintermediate demand. However, this
approach leaves domestic transactions inthese goods outside thescope ofthestudy,
which may signicantly distort theresults oftheestimates. ethird approach is
based ondeveloping “cost‑output” tables andtheir international modication, where
cross‑border trade ows are decomposed intocomponents similar totransactions
between theindustries andnal consumers within thedomestic economy. is is
themost appropriate approach, but it also has disadvantages interms ofthequality
ofinternational statistics andthepossibility toisolate theuser’s import by consum‑
ing industries (Daudin, Riart, andSchweisguth 2011). According totheOrganisa‑
tion forEconomic Co‑operation andDevelopment (OECD 2013), this issue is both
relevant andrequires thedevelopment ofnew trade statistics tocomplement existing
ones. every nature oftheproblem requires acoordinated international approach
tobuild adatabase andmethodology based onocial statistics that are widely ac‑
cepted andapproved.
Ingeneral, studying GVC involves analysing thefollowing elements: thestruc‑
ture ofthe“cost‑output” system, which describes theprocess ofconverting raw ma‑
terials intonal products; geographical features oftheprocesses distribution within
theframework ofGVC; management structure, which shows how thecontrol andman‑

142
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
agement ofGVC is carried out; theinstitutional environment where theGVC is locat‑
ed (Maruschak 2017, p.31).
Quantitative indicators that characterise thescale, depth andlength ofthechain,
as well as thelevel ofparticipation andrelative positions ofcountries inthechain, are
important when studying GVCs. One way ofassessing such participation, which was
developed earlier intheacademic literature, is tocalculate theshare ofvertical spe‑
cialisation, which can be interpreted as theimport component ofexport. Atthesame
time, thevalue ofimported components used intheproduction ofexport products
andthevalue ofexport added abroad are dierrent concepts, since imports may in‑
clude thevalue added inthedomestic economy. einternational “cost‑output” ma‑
trix developed by theOECD allows thecalculation ofthevalue added that is returned
tothedomestic economy as part offoreign components. Based onthis matrix, aglob‑
al “cost‑output” database has been created. It includes annual international inter‑
industry “cost‑output” matrices covering 55countries – 34 OECD countries and
21non‑member countries, as wel l as asepa rate category of“other countries oftheworld”
(Kravcova 2016, p.41). Ukraine is not included inthelist ofcountries. us, asynthe‑
sis ofexisting ideas, methodologies andapproaches toanalysing global value chains
andforming acomprehensive theoretical approach totheir study is relevant.
Global trends in the modern development of internaonal
trade and trade policy: challenges for Ukraine
eUkrainian economy is quite open interms ofthegoods andservices export ratio
toGDP, although it does not among themost open economies intheworld. Ingen‑
eral, theopenness ofUkraine’s economy interms oftheforeign trade toGDP ratio
exceeds theworld average. Under such conditions, Ukraine’s economic development
depends signicantly onthestate oftheworld economic situation, including thedy‑
namics andscale ofchanges taking place.
Inturn, thedynamics, content andscope ofinternational economic interactions to‑
day are determined by global development trends, which reect profound transforma‑
tions inalmost all thespheres ofsociety, andthespeed oftherelevant changes is con‑
stantly increasing. Inthis context thefollowing processes are particularly important
(IER 2016, p.11): thedigitalisation ofall spheres oflife; technological innovations; in‑
creasing interdependence between rms, countries, markets andgeographical regions;
“rebalancing” theworld economy; globalisation, which signicantly changes thebusi‑
ness environment, regardless ofits size anddegree ofinternationalisation; theinten‑
sive anddynamic development ofinternational system toregulate economic relations,
which includes international economic organisations, international agreements, con‑
sultations, etc.; thegrowing importance ofhealthcare intheeconomy. eCOVID–19
crisis also raised theissue ofinternational trade security, as restrictions oninternation‑

143
Integraon of Ukraine to the Global Value Chains
al value chains may have contributed toeconomic downturns during thecrisis (For‑
tunato 2020; GTIPA 2021). Ingeneral, these processes aect thenature andfeatures
ofinternational economic co‑operation inone way or another.
As fortheinternational trade ingoods andservices directly, today, experts highlight
several important qualitative changes (IER 2016, p.13–14): theincrease inthenum‑
ber ofregional agreements; thesearch foragreements ontrade ingoods that until re‑
cently were not allocated toaseparate group (i.e., so‑called environmentally friend‑
ly goods); thesearch foragreements todeepen or complement theacting agreements
within theWTO framework; therapid development oftechnology has signicantly
reduced transport, communication andtheother costs; theliberalisation ofcross‑bor‑
der movement ofgoods, services, capital andlabour; thedynamic development ofin‑
ternational trade intechnologies andhigh‑tech goods, which are thematerial embod‑
iment ofnew technologies; thedevelopment ofe‑commerce is afactor that determines
today thedynamics andstructure ofinternational trade ingeneral andthepeculiar‑
ities ofexport‑import operations inparticular.
ecurrent structure oftheUkrainian economy has been shaped by external fac‑
tors. is means that thegovernment andbusinesses must react promptly andappro‑
priately tonew global economic andpolitical challenges. Atthesame time, thedevel‑
opment ofthedomestic market as an alternative tointernational markets is virtually
impossible today without exploiting theopportunities oered by theglobal market
forgoods, services, capital andlabour.
Infact, themain goal ofexport development should ultimately be tosecure employ‑
ment andincome, andtoincrease theeciency ofnational production. Inasubstan‑
tial sense, exports andexport promotion policies should become afactor andatool
formodernising Ukraine’s economy. Inother words, it is aquestion ofmaking thepres‑
ence ofUkrainian producers andservice providers afactor inthecountry’s econom‑
ic development.
Idenfying the prospects for Ukraine’s integraon
into global value chains
eleading long‑term trend inthedevelopment ofUkrainian exports is adecrease
intheshare ofCIS countries andasimultaneous increase intheshare ofEU coun‑
tries (Figure1).
is reorientation is primarily due toglobal economic processes andstructural
changes ininternational markets. emode ofgoods or services supply andthepar‑
ticularities ofthemarket structure also inuence thegeographical structure.
In2019, theshare ofexports ofgoods andservices toCIS countries decreased
by 12.3 percentage points compared tothesame period in2010. Atthesame time,
theshare ofexports ofgoods andservices totheEU increased from 25.8% in2010

144
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
to37.3% in2019. eshare ofexports ofgoods andservices toother countries in‑
creased by 0.4 percentage points over thesame period.
When analysing theexports ofgoods separately, asimilar trend can be observed.
Inparticular, theshare ofexports toCIS countries in2019 was 13.5%, which was
22.9 percentage points less compared to2010. eshare ofUkrainian goods exports
totheEU increased by almost 1.3 times over theperiod 2010–2019, andtoother coun‑
tries by 2.6 percentage points.
38.5 39.4 38 36.6 29.5 24.2 21.6 20.3 22.7 26.2
25.8 26.4 25.6 26.9
31.8
32.8 35.1 38.3 40.3 37.7
35.7 34.2 36.4 36.5 38.7 43.0 43.3 41.4 37.0 36.1
0
10
20
30
40
50
60
70
80
90
100
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
%
CIS count ries EU countries Oth er c ou n tr ies
Figure 1. Geographical structure of exports of goods and services from Ukraine, 2010–2019 years, (%)
Source: calculated according to the data of State Stascs Service of Ukraine.2
In2019, theshare ofservices exports toCIS countries decreased by 5.9 percent‑
age points compared tothesame period in2010. eshare ofservices exports toEU
countries increased from 27.4% to28.6% during 2010–2019. eshare ofservices ex‑
ports toother countries increased by 4.7 percentage points over thesame period.
estructure ofexports ofgoods andservices ofany country is shaped both by
theinternational demand forthecorresponding goods andservices andby thelevel
andspecics ofthenational economic development. estructure ofUkrainian ex‑
ports ofgoods partially coincides with thestructure ofworld exports.
While electrical machinery (onaverage 13.3%), mechanical machines, nuclear
boilers (onaverage 11.6%), andvehicles (onaverage 7.7%) dominated world exports
intheperiod 2010–2019, theshare ofelectrical machinery inUkrainian exports dur‑
ing thesame period was onaverage 5.3%, i.e., 2.5 times less than theworld average.
eshare ofmechanical machines andnuclear boilers (4.9% onaverage) is 2.4 times
2
Ukraine’s Foreign Trade in Goods and Services in 2014. State Stascs Service of Ukraine (retrieved
from hp://www.ukrstat.gov.ua); Ukraine’s Foreign Trade in Goods and Services in 2018. State
Stascs Service of Ukraine (retrieved from hp://www.uk rstat.gov.ua). Geographical structure
of Ukraine’s foreign trade in goods in 2018–2019 (retrieved from hp://www.ukrstat.gov.ua) (ac‑
cessed: 24.12.2021).

145
Integraon of Ukraine to the Global Value Chains
smaller, while he share ofvehicles (0.6% onaverage) is 12.8 times smaller. Atthesame
time, theshare ofUkrainian exports ofbase metals andtheir products is high (18.3%
onaverage in2010–2019), which is 8.3 times more than theworld total.
A signicant share ofUkrainian exports during the period 2010–2019 was
ofproducts ofplant origin, which ranged from 4.8% in 2010 to19.3% in2019,
which is 20.8 times higher onaverage than theglobal indicator. Ukrainian fats
andoils accounted foran average of7.8%ofdomestic exports during 2010–2019.
Overall, thegrowth rate ofUkrainian exports ofagricultural, food andore prod‑
ucts outpaced theglobal rate, indicating fairly stable global demand andtheresil‑
ience ofthese sectors tocrises intheeconomy.
eabove shows that Ukrainian exports are characterised by alow share ofhighly
processed industrial products andahigh share oflow value‑added products, inpar‑
ticular, metallurgical products, agriculture, andfood industry products. Atthesame
time, Ukraine holds leading positions intheworld interms ofcertain goods exports.
Inparticular, theshare of Ukrainian grain exports increased from 4.8% in 2010
to19.3in2019, theshare offat andvegetable oil exports increased from 5.1% to9.5%,
andore from 5.0% to7.2%.
ere were 20 main partner countries in2010–2019, which accounted forbetween
68.5% in2010 and70% in2019 ofdomestic exports (Table1).
During 2010–2019, thestructure ofUkrainian services exports was strongly domi‑
nated by transport services (62.5% onaverage), telecommunication, computer andin‑
formation services (11.5% onaverage), services intheprocessing ofmaterial resources
(10.5% onaverage) andbusiness services (8.0% onaverage).
Тable 1. The main partner countries in the export of goods, 2011–2019, (%)
Country 2011 2012 2013 2014 2015 2016 2 017 2018 2019
Austria 0.9 0.8 0.9 1.0 0.9 1.0 1.2 1.2 1.2
Belarus 2.8 3.3 3.1 3.0 2.3 2.5 2.6 2.8 3.1
China 3.2 2.6 4.3 5.0 6.3 5.0 4.7 4.6 4.0
Czech Republic 1.2 1.0 1.3 1.4 1.4 1.5 1.7 1.9 1.8
Egypt 2.0 4.2 4.4 5.3 5.5 6.2 4.2 3.3 4.5
Germany 2.6 2.4 2.5 3.0 3.5 3.9 4.1 4.7 4.8
Hungary 2.0 2.2 2.5 2.8 2.4 2.9 3.1 3.5 3.1
India 3.3 3.3 3.1 3.4 3.8 5.2 5.1 4.6 4.0
Iran 1.6 1.7 1.3 1.3 1.4 1.9 1.3 0.9 1.2
Israel 0.7 1.2 1.1 1.1 1.6 1.3 1.4 1.2 1.2
Italy 4.4 3.6 3.7 4.6 5.2 5.3 5.7 5.6 4.8
Moldova 1.3 1.2 1.4 1.4 1.4 1.3 1.6 1.7 1.5
Netherlands 1.2 1.2 1.7 2.1 2.4 2.7 3.9 3.4 3.7
Poland 1.2 3.7 4.1 4.9 5.2 6.1 6.3 6.9 6.6
Romania 1.4 0.8 0.9 1.1 1.5 2.0 1.9 2.0 2.0
Russia 29. 0 25.6 23.7 18.2 12.7 9.9 9.1 7.7 6.5
Slovakia 1.2 1.0 1.2 1.2 1.2 1.3 1.5 1.8 1.4

146
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
Country 2011 2012 2013 2014 2015 2016 2 017 2018 2019
Spain 1.4 2.2 1.6 2.2 2.7 2.8 2.9 2.9 3.0
Tur key 5.5 5.4 6.0 6.6 7.3 5.6 5.8 5.0 5.2
United States of America 1.6 1.5 1.4 1.2 1.3 1.2 1.9 2.3 2.0
Source: calculated according to the data of State Stascs Service of Ukraine.3
Although theaverage share ofexports ofdomestic transport services is 3 times
higher than theglobal average, their share in theglobal structure was only 0.7%.
eshare ofdomestic exports oftelecommunication, computer andinformation ser‑
vices intheglobal structure ofthese services exports was 0.3% during 2010–2019.
eshare ofdomestic exports ofservices intheprocessing ofmaterial resources was
onaverage 5.0 times higher than theglobal average. Atthesame time, theshare ofdo‑
mestic exports ofbusiness services was onaverage 2.6 times lower than theglobal aver‑
age. Also, theaverage share ofdomestic exports oftravel‑related services intheglobal
structure ofservices exports is quite low –only 0.02%oftheir global exports.
Analysis of the domestic economy export orientation shows that between
2013and2019, onaverage, about 19.6%ofgoods andservices produced inUkraine
were exported (Table2). emetallurgy industry was themost export‑oriented dur‑
ing this period –its export quota averaged 63.4%.
efollowing sectors ofthedomestic economy also have signicant export shares:
machinery andequipment production –59.1%, onaverage; computer programming
– 50.3%, onaverage; metal ore mining –47.4%, onaverage; electrical equipment pro‑
duction –45.6%, onaverage; transport andwarehousing –36.5%, onaverage; timber
andpaper production –32.5%; postal andcourier operations –32.1%, onaverage;
agriculture, forestry andshing –28.8%, onaverage. elowest export quota be‑
tween 2013and2019 was intheprovision ofpublic administration services anded‑
ucation –onaverage 0.1% and0.4%, respectively, which are predominantly domesti‑
cally oriented.
Тable2. Export orientaon of the naonal economy sectors, 2013–2019, (%) (share of export
in the total output of the industry)
Type of economic ac vity 2013 2014 2015 2016 2017 2018 2 019
Total 19. 9 22.9 21.0 19. 6 19.3 18 .1 16.7
Manufacture of basic metals 66.7 71.4 69. 8 60.4 59.8 60.4 55.5
Mining of metal ores 44.5 50.4 53.5 45.6 47. 5 44.7 45.4
Computer programming 41.6 50.7 58.6 53.3 52.8 51.1 44.3
Postal and courier acvies 0.0 20.3 37. 2 32.2 44.6 51 .9 38.6
Manufacture of machinery and equipment, not
elsewhere classied
71.7 86.8 70.8 54.0 48.8 43.7 38.1
Manufacture of electrical equipment 65.8 59. 0 42.7 38.0 37. 9 38.1 37.4
Agriculture, forestry and shing 23.1 28.1 29.0 29.1 30.3 27. 9 34.3
3 Ukraine’s Foreign Trade in Goods and Services in 2014; 2016; 2018; 2019. State Stascs Service
of Ukraine (retrieved from hp://www.ukrstat.gov.ua) (accessed: 25.12.2021).

147
Integraon of Ukraine to the Global Value Chains
Type of economic ac vity 2013 2014 2015 2016 2017 2018 2 019
Manufacture of wood, paper 31.9 35.0 33.5 32.2 33.5 32.4 28.7
Transport, warehousing 32.3 44.0 38.7 41.1 38.3 32.7 28.5
Manufacture of chemicals 57. 9 59.9 33.8 26.8 27. 3 2 9.0 22.3
Manufacture of food products 25.7 30.8 23.0 24.5 25.2 23.8 22.2
Research and development 27. 5 28.6 34.7 31.1 29.7 19. 2 21.8
Manufacture of other transport equipment 40.6 42.5 35.6 31.4 13.6 13.6 21.6
Manufacture of furniture 30.6 33.8 28.8 26.4 25.8 23.3 20.7
Manufacture of texles 70.9 52.4 19.1 18.8 21.1 21.7 19. 5
Manufacture of motor vehicles 65.3 49.8 18.8 17.6 15.6 17. 0 16.0
Manufacture of computers 69.2 64.2 25.6 21.1 1 7. 8 15.4 14.9
Manufacture of rubber and plasc products 19.0 19.4 14.3 13.2 14.4 14.7 14.2
Manufacture of fabricated metal products 25.4 33.7 24.3 18.9 18.4 16.5 14.1
Other services 16.6 14.9 16.3 14.8 12.1 13.9 12.8
Legal and accounng acvies 13.1 18.1 20.0 15.8 13.7 15.9 11.4
Adversing 8.7 9. 6 10.9 10.0 11. 5 9.3 9.7
Accommodaon and catering 54.4 22.0 14. 2 13.5 14.3 12.4 9.4
Manufacture of rened petroleum products 28.6 24.5 7. 0 6.2 7.1 7.7 8.4
Administrave services 6.6 11.8 12.3 10.3 10.7 9.5 8.0
Arts, sports, entertainment and recreaon 13.1 7. 5 8.6 8.9 10.8 8.4 7.5
Manufacture of other non‑metallic mineral
products
12.6 14.6 11.7 9. 2 9.0 8.8 7.2
Manufacture of basic pharmaceucal products 19.0 19.9 7.6 7. 5 7. 7 7. 5 6.5
Telecommunicaons 14.3 16.5 18.7 15.1 12.6 11.0 6.0
Water supply 3.5 3.6 4.0 4.0 4.2 3.9 3.4
Manufacture of coke and coke products 13.8 11.0 5.9 4.5 4.6 4.2 3.1
Oil and gas extracon 7.0 6.0 3.2 2.7 3.4 3.0 2.9
Electricity supply 4.1 4.6 4.2 2.2 2.8 3.0 2.9
Publishing 3.4 4.3 4.2 3.3 2.8 3.5 3.0
Financial and insurance acvies 3.3 2.5 4.2 2.7 2.1 2.5 2.3
Construcon 1.3 1.5 3.2 1.8 0.7 0.9 0.5
Real estate acvies 1.8 0.6 0.3 0.6 0.6 0.5 0.5
Healthcare 0.7 0.4 0.4 0.5 0.4 0.4 0.4
Public administraon and defence 0.3 0.3 0.6 0.5 0.5 0.2 0.2
Educaon 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Mining of coal 11.7 20.3 2.7 1.9 3.2 0.2 0.0
Source: calculated according to the data of State Stascs Service of Ukraine.4
Analysing trade interms ofvalue added allows an assessment ofexports inadi‑
mension comparable toGDP, andhence abetter understanding oftherole ofexports
inthestructure ofthenational economy.
Comparing exports in terms ofgross output andvalue added shows that dur‑
ing 2013–2019, theshare ofservices was traditionally lower (34.3%ofoutput against
4
Input‑Output table for 2013–2019 (at consumer prices). State Stascs Service of Ukraine (re‑
trieved from hp://www.ukrstat.gov.ua) (accessed: 26.12.2021).

148
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
37.8%of value added), while the share of manufacturing was on average higher
(65.7%ofoutput against 62.2%ofvalue added) (see Table3 &Table4).
Тable 3. Share in value added export by industry, 2013–2019, (%)
Type of economic ac vity 2013 2014 2015 2016 2 017 2018 2 019
Agriculture, forestry and shing 15.8 18.9 24.7 25.5 24.1 23.7 26.8
Mining of coal and lignite 1.4 1.0 0.1 0.1 0.2 0.0 0.0
Extracon of crude petroleum
and natural gas
0.7 0.6 0.5 0.6 0.7 0.7 0.6
Mining of metal ores 9.2 9.0 8.0 7.1 8.7 8.8 9.2
Manufacture of food products;
beverages and tobacco products
6.1 7. 3 6.1 7. 0 6.9 6.2 5.8
Manufacture of texles, wearing apparel,
leather and related products
2.5 1.7 0.7 0.8 0.9 1.0 0.9
Manufacture of wood, paper, prinng
and reproducon
1.6 1.8 1.9 2.0 2.1 2.2 1.9
Manufacture of coke 0.2 0.1 0.1 0.1 0.1 0.1 0.0
Manufacture of rened petroleum
products
0.4 0.4 0.1 0.1 0.1 0.1 0.1
Manufacture of chemicals and chemical
products
1.7 1.5 1.0 0.7 0.6 0.7 0.5
Manufacture of basic pharmaceucal
products and pharmaceucals
0.3 0.4 0.2 0.2 0.2 0.2 0.2
Manufacture of rubber and plasc
products
0.4 0.3 0.3 0.3 0.3 0.3 0.3
Manufacture of other non‑metallic
mineral products
0.5 0.4 0.4 0.4 0.4 0.4 0.4
Manufacture of basic metals 5.9 10.3 9.5 8.7 9.1 9.8 7. 2
Manufacture of fabricated metal
products, except machinery
and equipment
0.8 0.8 0.7 0.6 0.6 0.7 0.6
Manufacture of computer, electronic
and opcal products
0.8 0.6 0.2 0.3 0.2 0.2 0.2
Manufacture of electrical equipment 2.2 1.7 1.1 1.0 1.1 1.3 1.1
Manufacture of machinery
and equipment, not elsewhere classied
4.6 4.2 3.3 2.9 2.6 2.4 2.2
Manufacture of motor vehicles, trailers
and semi‑trailers
1.0 0.7 0.2 0.2 0.2 0.3 0.2
Manufacture of other transport
equipment
4.3 2.1 1.4 1.2 0.7 0.6 1.0
Manufacture of furniture; other goods;
repair and installaon of machinery
and equipment
1.9 1.8 1.6 1.6 1.8 1.7 1.8
Electricity, gas, steam and air
condioning supply
0.9 0.9 0.8 0.5 0.6 0.8 0.8
Water supply; sewerage, waste
management and remediaon acvies
0.1 0.1 0.1 0.1 0.1 0.1 0.1
Construcon 0.3 0.2 0.4 0.3 0.1 0.2 0.1

149
Integraon of Ukraine to the Global Value Chains
Type of economic ac vity 2013 2014 2015 2016 2 017 2018 2 019
Wholesale and retail trade; repair
of motor vehicles and motorcycles
0.2 0.2 0.2 0.2 0.2 0.2 0.2
Transport, warehousing 17.9 18.1 18.1 19.7 18.8 17. 2 16.3
Postal and courier acvies 0.0 0.2 0.4 0.4 0.4 0.5 0.4
Accommodaon and catering 3.3 0.9 0.6 0.7 0.7 0.7 0.7
Publishing 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Telecommunicaons 1.8 1.6 1.9 1.4 1.1 1.0 0.5
Computer programming, consultancy,
and informaon service acvies
3.8 5.0 7.8 8.5 9.3 10.7 12.2
Financial and insurance acvies 1.2 0.8 1.0 0.6 0.5 0.6 0.6
Real estate operaons 0.9 0.2 0.2 0.3 0.3 0.3 0.3
Legal and accounng acvies 1.5 1.4 1.6 1.5 1.5 1.9 2.0
Research and development 1.6 1.5 1.7 1.3 1.3 1.0 0.9
Adversing and market research 0.7 0.6 0.8 0.8 0.8 0.9 0.9
Administrave and support service
acvies
0.6 0.9 0.9 1.0 1.0 1.1 1.1
Public administraon and defence;
compulsory social security
0.1 0.1 0.2 0.2 0.2 0.1 0.1
Educaon 0.1 0.0 0.0 0.0 0.0 0.0 0.0
Healthcare and social work 0.2 0.1 0.1 0.1 0.1 0.1 0.1
Arts, sports, entertainment
and recreaon
0.9 0.4 0.4 0.4 0.5 0.4 0.4
Other services 1.2 0.9 0.8 0.8 0.7 0.9 1.1
Tot a l 41.9 41.2 33.9 33.6 33.9 33.9 34.8
Source: calculated according to the data of State Stascs Service of Ukraine.5
Тable 4. Share in gross output export by industry, 2013–2019, (%)
Type of economic ac vity 2013 2014 2015 2016 2 017 2018 2 019
Agriculture, forestry and shing 15.8 18.9 21.3 21.8 20.3 19.9 23.0
Mining of coal and lignite 1.4 1.0 0.1 0.1 0.2 0.0 0.0
Extracon of crude petroleum
and natural gas
0.7 0.6 0.5 0.5 0.7 0.6 0.5
Mining of metal ores 9.2 9. 0 6.8 6.0 7.1 7. 3 7. 7
Manufacture of food products;
beverages and tobacco products
6.1 7. 3 11. 2 13.8 14.8 13.9 12.9
Manufacture of texles, wearing apparel,
leather and related products
2.5 1.7 1.3 1.4 1.5 1.6 1.5
Manufacture of wood, paper, prinng
and reproducon
1.6 1.8 2.0 2.1 2.2 2.3 2.0
Manufacture of coke 0.2 0.1 0.1 0.0 0.1 0.0 0.0
Manufacture of rened petroleum
products
0.4 0.4 0.6 0.5 0.6 0.6 0.6
5
Input‑Output table for 2013–2019 (at consumer prices). State Stascs Service of Ukraine (re‑
trieved from hp://www.ukrstat.gov.ua) (accessed: 26.12.2021).

150
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
Type of economic ac vity 2013 2014 2015 2016 2 017 2018 2 019
Manufacture of chemicals and chemical
products
1.7 1.5 2.0 1.3 1.4 1.5 1.1
Manufacture of basic pharmaceucal
products and pharmaceucals
0.3 0.4 0.4 0.4 0.4 0.4 0.4
Manufacture of rubber and plasc
products
0.4 0.3 0.4 0.4 0.4 0.4 0.3
Manufacture of other non‑metallic
mineral products
0.5 0.4 0.5 0.4 0.4 0.5 0.4
Manufacture of basic metals 5.9 10.3 8.2 7.7 7. 6 8.2 6.2
Manufacture of fabricated metal
products, except machinery
and equipment
0.8 0.8 0.8 0.6 0.7 0.7 0.6
Manufacture of computer, electronic
and opcal products
0.8 0.6 0.6 0.6 0.6 0.5 0.5
Manufacture of electrical equipment 2.2 1.7 1.5 1.3 1.7 1.8 1.7
Manufacture of machinery
and equipment, not elsewhere classied
4.6 4.2 3.7 3.1 3.0 2.8 2.6
Manufacture of motor vehicles, trailers
and semi‑trailers
1.0 0.7 1.0 1.1 0.7 0.9 0.8
Manufacture of other transport
equipment
4.3 2.1 1.3 1.2 0.7 0.8 1.3
Manufacture of furniture; other goods;
repair and installaon of machinery
and equipment
1.9 1.8 1.7 1.7 1.9 1.8 1.9
Electricity, gas, steam and air
condioning supply
0.9 0.9 0.8 0.5 0.6 0.7 0.7
Water supply; sewerage, waste
management and remediaon acvies
0.1 0.1 0.1 0.1 0.1 0.1 0.1
Construcon 0.3 0.2 0.4 0.3 0.1 0.2 0.1
Wholesale and retail trade; repair
of motor vehicles and motorcycles
0.2 0.2 0.2 0.1 0.2 0.2 0.2
Transport, warehousing 17.9 18.1 16.3 17. 2 16.2 15.0 14.3
Postal and courier acvies 0.0 0.2 0.4 0.3 0.4 0.4 0.4
Accommodaon and catering 3.3 0.9 0.6 0.6 0.6 0.7 0.6
Publishing 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Telecommunicaons 1.8 1.6 1.9 1.4 1.1 1.0 0.5
Computer programming, consultancy,
and informaon service acvies
3.8 5.0 6.6 7.2 7. 8 9.0 10.4
Financial and insurance acvies 1.2 0.8 0.9 0.5 0.4 0.5 0.5
Real estate operaons 0.9 0.2 0.1 0.2 0.2 0.3 0.2
Legal and accounng acvies 1.5 1.4 1.3 1.3 1.3 1.6 1.7
Research and development 1.6 1.5 1.5 1.1 1.1 0.9 0.8
Adversing and market research 0.7 0.6 0.7 0.7 0.7 0.8 0.8
Administrave and support service
acvies
0.6 0.9 0.9 0.9 0.9 1.0 1.0
Public administraon and defence;
compulsory social security
0.1 0.1 0.2 0.2 0.2 0.1 0.1

151
Integraon of Ukraine to the Global Value Chains
Type of economic ac vity 2013 2014 2015 2016 2 017 2018 2 019
Educaon 0.1 0.0 0.0 0.0 0.0 0.0 0.0
Healthcare and social work 0.2 0.1 0.1 0.1 0.1 0.1 0.1
Arts, sports, entertainment
and recreaon
0.9 0.4 0.3 0.3 0.4 0.3 0.3
Other services 1.2 0.9 0.7 0.7 0.6 0.8 0.9
Tot a l 41.9 41.2 39.9 39.7 40.1 40.0 40.5
Source: calculated according to the data of State Stascs Service of Ukraine.6
Among thebranches oftheprocessing industry where theaverage share inexports
ofoutput prevailed over theaverage share inexports ofvalue added during 2013–2019,
wecan see thefollowing:
–
manufacture offood products; beverages andtobacco products –11.5% and6.5%
respectively;
–
manufacture ofmachinery andequipment not included inother groups –3.4
and3.2%, respectively;
–
manufacture of furniture, other products, and installation of machinery
andequipment –1.8 and1.7% respectively;
–manufacture ofelectrical equipment –1.7 and1.4%, respectively;
–
manufacture oftextiles, clothing, leather andother materials –1.6 and1.2%,
respectively;
–manufacture ofchemicals andchemical products –1.5 and0.9%, respectively;
–manufacture ofrened petroleum products 0.5 and0.2%, respectively.
eprocessing industries where theaverage share inexports ofvalue added pre‑
vailed over theaverage share inexports ofgross output during theperiod include:
–agriculture, forestry andsheries –22.8%ofvalue added against 20.2%ofgross
output;
–extractive industry –8.6%ofvalue added against 7.6%ofgross output.
Intheservices sector, thesectors inwhich theaverage share ofvalue added exports
between 2013and2019 prevailed over theaverage share ofgross output exports are:
transport, warehousing (18.0% and16.4%, respectively); computer programming, con‑
sulting andinformation services (8.2% and7.1%, respectively); activities intheareas
oflaw andaccounting, head oce activities, management consulting, architectur‑
al andengineering activities, technical testing andresearch (1.6% and1.5%, respec‑
tively); research, scientic andtechnical activities (1.3% and1.2%, respectively); tem‑
porary accommodation andcatering (1.1% and1.0%, respectively); administrative
andsupport services activities (0.9% and0.8%, respectively); provision ofother servic‑
es (0.9% and0.8%, respectively); other services (0.9% and0.8%, respectively); adver‑
tising andmarket research, veterinary activities (0.8% and0.7%, respectively); nan‑
cial andinsurance activities (0.7% and0.6%, respectively); art, sport, entertainment
6
Input‑Output table for 2013–2019 (at consumer prices). State Stascs Service of Ukraine (re‑
trieved from hp://www.ukrstat.gov.ua) (accessed: 26.12.2021).

152
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
andrecreation (0.5% and0.4%, respectively); real estate transactions (0.3% and0.2%,
respectively).
Among these industries, thetwo sectors with thehighest average share ofvalue
added exports were transport andwarehousing (18.0%) andcomputer programming,
consulting andinformation services (8.2%).
Inorder toensure accelerated GDP growth, it is important not just toincrease ex‑
ports, but toincrease exports ofgoods andservices that provide higher value add‑
ed growth. Interms ofthis indicator, themost important export sectors are agricul‑
ture, forestry andsheries (onaverage 22.8%ofexports invalue added); transport
andwarehousing (onaverage 18%ofexports invalue added) andcomputer program‑
ming, consulting andinformation services (onaverage 8.2%ofexports invalue add‑
ed). eproducts ofthemetallurgical industry (onaverage 8.6% inexports ofvalue
added) andfood, beverage andtobacco production (onaverage 6.5% inexports ofval‑
ue added) should also be added tothis list.
During 2013–2019, thecontent ofimported raw materials inexport products aver‑
aged 19.6% (Table5). at is exactly theindicator that shows thelevel oftheeconomy’s
integration intoglobal value chains.
Тable 5. The content of imported raw materials and components in export products by sector,
2013–2019, (%)
Type of economic ac vity 2013 2014 2015 2016 2017 2018 2 019
Agriculture, forestry and shing 23.1 28.1 29.0 29.1 30.3 27.9 34.3
Mining of coal and lignite 11.7 20.3 2.7 1.9 3.2 0.2 0.0
Extracon of crude petroleum and natural
gas
7.0 6.0 3.2 2.7 3.4 3.0 2.9
Mining of metal ores 44.5 50.4 53.5 45.6 47. 5 44.7 45.4
Manufacture of food products; beverages
and tobacco products
25.7 30.8 23.0 24.5 25.2 23.8 22.2
Manufacture of texles, wearing apparel,
leather and related products
70.9 52.4 19.1 18.8 21.1 21.7 19. 5
Manufacture of wood, paper, prinng
and reproducon
31.9 35.0 33.5 32.2 33.5 32.4 28.7
Manufacture of coke 13.8 11.0 5.9 4.5 4.6 4.2 3.1
Manufacture of rened petroleum products 28.6 24.5 7. 0 6.2 7. 1 7.7 8.4
Manufacture of chemicals and chemical
products
57. 9 59.9 33.8 26.8 27. 3 2 9.0 22.3
Manufacture of basic pharmaceucal
products and pharmaceucals
19.0 19.9 7.6 7. 5 7. 7 7.5 6.5
Manufacture of rubber and plasc products 19.0 19. 4 14.3 13.2 14.4 14.7 14.2
Manufacture of other non‑metallic mineral
products
12.6 14.6 11.7 9. 2 9. 0 8.8 7. 2
Manufacture of basic metals 66.7 71.4 69. 8 60.4 59.8 60.4 55.5
Manufacture of fabricated metal products,
except machinery and equipment
25.4 33.7 24.3 18.9 18.4 16.5 14.1

153
Integraon of Ukraine to the Global Value Chains
Type of economic ac vity 2013 2014 2015 2016 2017 2018 2 019
Manufacture of computer, electronic
and opcal products
69. 2 64.2 25.6 21.1 17.8 15.4 14.9
Manufacture of electrical equipment 65.8 59. 0 42.7 38.0 37. 9 38.1 37.4
Manufacture of machinery and equipment,
not elsewhere classied
71.7 86.8 70.8 54.0 48.8 43.7 38.1
Manufacture of motor vehicles, trailers
and semi‑trailers
65.3 49.8 18.8 17.6 15.6 17. 0 16.0
Manufacture of other transport equipment 40.6 42.5 35.6 31.4 13.6 13.6 21.6
Manufacture of furniture; other goods;
repair and installaon of machinery
and equipment
30.6 33.8 28.8 26.4 25.8 23.3 20.7
Electricity, gas, steam and air condioning
supply
4.1 4.6 4.2 2.2 2.8 3.0 2.9
Water supply; sewerage, waste management
and remediaon acvies
3.5 3.6 4.0 4.0 4.2 3.9 3.4
Construcon 1.3 1.5 3.2 1.8 0.7 0.9 0.5
Wholesale and retail trade; repair of motor
vehicles and motorcycles
0.2 0.2 0.2 0.2 0.2 0.2 0.2
Transport, warehousing 32.3 44.0 38.7 41.1 38.3 32.7 28.5
Postal and courier acvies 0.0 20.3 37. 2 32.2 44.6 51 .9 38.6
Accommodaon and catering 54.4 22.0 14. 2 13.5 14.3 12.4 9.4
Publishing 3.4 4.3 4.2 3.3 2.8 3.5 3.0
Telecommunicaons 14.3 16.5 18.7 15.1 12.6 11.0 6.0
Computer programming, consultancy,
and informaon service acvies
41.6 50.7 58.6 53.3 52.8 51.1 44.3
Financial and insurance acvies 3.3 2.5 4.2 2.7 2.1 2.5 2.3
Real estate operaons 1.8 0.6 0.3 0.6 0.6 0.5 0.5
Legal and accounng acvies 13.1 18.1 20.0 15.8 13.7 15.9 11.4
Research and development 27.5 28.6 34.7 31.1 29.7 19.2 21.8
Adversing and market research 8.7 9.6 10.9 10.0 11.5 9.3 9.7
Administrave and support service acvies 6.6 11.8 12.3 10.3 10.7 9.5 8.0
Public administraon and defence;
compulsory social security
0.3 0.3 0.6 0.5 0.5 0.2 0.2
Educaon 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Healthcare and social work 0.7 0.4 0.4 0.5 0.4 0.4 0.4
Arts, sports, entertainment and recreaon 13.1 7. 5 8.6 8.9 10.8 8.4 7.5
Other services 16.6 14.9 16.3 14.8 12.1 13.9 12.8
Total 19. 9 22.9 21.0 19. 6 19. 3 18.1 16.7
Source: calculated according to the data of State Stascs Service of Ukraine.7
ereorientation oftheUkrainian economy is increasingly aquestion ofreducing
foreign trade incommodities andfocusing onexports inhigh‑tech goods. is trend
7
Input‑Output table for 2013–2019 (at consumer prices). State Stascs Service of Ukraine (re‑
trieved from hp://www.ukrstat.gov.ua) (accessed: 26.12.2021).

154
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
will contribute tobuilding Ukraine’s export capacity andensuring an innovative mod‑
el ofnational economic development.
Ocially, Ukraine does not have alist ofhigh‑tech goods inaccordance with
theUCCFT. Consequently, there is aproblem incalculating asingle correct value
forthevolume ofhigh‑tech products export. is causes diculties indetermining
this indicator andalso generates dierent values forits share inthestructure ofex‑
ports ingoods. is situation arises because theUkrainian legislation equates knowl‑
edge‑intensive technology with high technology, but not all ofthem are as such.
eSecretariat oftheOECD developed theStandard International Trade Clas‑
sication based ontheproduct approach, according towhich, thefollowing groups
ofgoods are classied as high‑tech: aerospace products; computer andoce equip‑
ment; electronics andtelecommunications; pharmaceutical products; scientic in‑
struments; electrical machinery andequipment; chemical products; non‑electrical
machinery andequipment.
Analysis offoreign trade inhigh‑tech goods inUkraine in2010–2019 shows that
theexport ofgroups ofgoods that are partly or fully classied as high‑tech is signi‑
cantly lower than their import (Figure2; Figure3).
0
500
1000
1500
2000
2500
3000
3500
4000
mln.US D
Inorganic chemicals
Organic chemical combinations
Pharmaceutical products
Tanning extracts
Nuclear reactors, boilers, machines and equipment
Electric machines and equipment; video- and audio equipment
Land transport
Aircrafts and space vehicles
Optical instruments and apparatus
Figure 2. Volumes of certain groups of goods export, 2010–2019 years
Source: calculated according to the data of State Stascs Service of Ukraine.8
8 Ukraine’s Foreign Trade in Goods and Services in 2010–2019. State Stascs Service of Ukraine
(retrieved from hp://www.ukrstat.gov.ua) (accessed: 28.12.2021).
mln. USD

155
Integraon of Ukraine to the Global Value Chains
0
1000
2000
3000
4000
5000
6000
7000
mln . US D
Inorganic chemicals
Organic chemical combinations
Pharmaceutical products
Tan ni ng e xtr acts
Nuclear reactors, boilers, machines and equipment
Electric machines and equipment; video- and audio equipment
Lan d tr ans po rt
Aircrafts and space vehicles
Optical instruments and apparatus
Figure 3. Volumes of certain groups of goods import, 2010–2019 years
Source: calculated according to the data of State Stascs Service of Ukraine.9
ebalance ofthese groups ofgoods was negative from 2010–2019. eshare
ofknowledge‑intensive exports during this period averaged 15.4%ofthetotal ex‑
ports ofgoods, while theshare ofimports was almost 34.0%. Amore detailed anal‑
ysis ofthestructure ofUkrainian exports andimports ofhigh‑tech goods between
2010and2019 shows that only goods from the“Products ofinorganic chemistry”
group had apositive balance, and, prior to2017, goods from the“Aircra andspace
vehicles” group.
Inthestructure ofexports, between 2010and2019, thelargest share was taken
by groups ofdomestic goods such as “Electrical machinery andequipment; video
andaudio equipment” –an average of5.4%oftotal domestic goods exports; “Reac‑
tors, boilers, machinery, equipment” –an average of4.9%oftotal domestic goods ex‑
ports, and“Products ofinorganic chemistry” –an average of2.2%oftotal domestic
goods exports.
Inthestructure ofhigh‑tech imports during 2010–2019, thelargest share belonged
tothegroup “Reactors, boilers, machinery, equipment” –onaverage 30.4%oftotal im‑
ports ofhigh‑tech goods. Also, afairly high share ofhigh‑tech imports inthetotal struc‑
ture ofimports belongs tosuch groups as “Electrical machinery andequipment; video
9 Ukraine’s Foreign Trade in Goods and Services in 2010–2019. State Stascs Service of Ukraine
(retrieved from hp://www.ukrstat.gov.ua) (accessed: 28.12.2021).

156
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
andaudio equipment” –an average of24.2% tothetotal imports ofhigh‑tech goods;
“Land vehicles” –an average of20.7% tothetotal imports ofhigh‑tech goods; “Phar‑
maceutical products” –an average of12.1% tothetotal imports ofhigh‑tech goods;
“Organic chemical compounds” –3.8% tothetotal imports ofhigh‑tech goods.
Overall, as Figure2 andFigure3 show, from 2010–2019, foreign trade inhigh‑tech
goods was characterised by alow share intotal exports andasignicant negative
balance.
Analysing theforeign trade inhigh‑tech goods based onknowledge‑intensive prod
‑
ucts indynamics, one can see that by 2012, there was an increase inthevolume offor‑
eign trade inhigh‑tech goods. However, from 2014–2015, thevolume offoreign trade
inhigh‑tech goods decreased by more than 2.2 times. Only since 2016 has been an
increase (Figure4).
8.6
11.0
11.5
10.5
8.3
5.7
4.9
5.8
6.4
6.2
16.1
23.9
25.4
23.8
15.8
10.9
14.1
17.8
20.7
24.0
-7.5
-12.9
-13.9
-13.2
-7.5
-5.2
-9.1
-12.0
-14.2
-17.7
(20 )
(15 )
(10 )
(5)
-
5
10
15
20
25
30
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
billio n USD
Export Im po rt Balance
Figure 4. Dynamics of foreign trade in high‑tech goods of Ukraine, 2010–2019 years, USD billion
Source: calculated according to the data of State Stascs Service of Ukraine.10
Compared todeveloped countries, thedynamics ofUkraine’s high‑tech goods ex‑
ports over theperiod 2010–2019 show an annual decrease inits share (Figure5). Inpar‑
ticular, theshare ofhigh‑tech goods exports inthetotal structure ofUkraine’s exports
decreased by 3.4 p.p.in2019 compared to2010, amounting to13.4%. is is thelow‑
est gure among thecountries represented, as theshare ofhigh‑tech goods exports
inthetotal export structure oftheUSA, China, Japan andGermany exceeds 50%. Note
that theUS, China, Japan, Germany andPoland together accounted forbetween 33.4%
and60.1%ofglobal exports ofhigh‑tech goods during 2010–2019.
10 Ukraine’s Foreign Trade in Goods and Services in 2010–2019. State Stascs Service of Ukraine
(retrieved from hp://www.ukrstat.gov.ua) (accessed: 28.12.2021).

157
Integraon of Ukraine to the Global Value Chains
0
10
20
30
40
50
60
70
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
%
China
Uni te d St ates of
America
Japan
Germany
Pol and
Ukr a in e
Figure 5. The share of high‑tech goods expor ts in total exports of developed countries and Ukraine,
2010–2019 years %
Source: compiled and calculated according to the data.11
is is primarily due tothesocial, political andeconomic situation inthecoun‑
try, as well as theshutdown ofanumber ofstrategic production facilities andtheloss
ofcontrol over thepart ofthestate’s territory as aresult ofmilitary aggression by
theRussian Federation.
Figure5 also shows that, despite its potential inthehigh‑tech sphere, Ukraine re‑
mains dependent onimported high‑tech goods.
Compared todeveloped countries, thedynamics ofUkraine’s export inhigh‑tech
goods in2010–2019 shows an annual decrease inits share (Figure6).
11
Trade stascs for internaonal business development. ITC. URL: hps://www.tradem ap.org/
tradestat/Product_SelProduct_TS.aspx (accessed: 4.01.2022).

158
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
0
5
10
15
20
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
%
China
United
States of
America
Japan
Germany
Pola nd
Ukrain e
Figure 6. The share of high‑tech goods exports in total exports of developed countries and Ukraine,
2010–2019 years %
Source: compiled and calculated according to the data.12
Conclusions
econcept ofglobal value chains allows foraqualitatively new level ofresearch
intothefunctioning oftheworld economy, as well as thestudy oftheessence andcom‑
ponents ofmodern international commodity co‑operation, production andtechno‑
logical potential ofindividual countries andtheir competitiveness. is concept is
extremely important forUkraine inthecontext ofdeepening theregional econom
‑
ic integration with theEU andother countries within theframework ofbilateral
andmultilateral trade andeconomic agreements. Ukraine has held leading positions
inthemarkets fornon‑precious metals andtheir products (an average of18.3%), as well
as inthemarkets forproducts ofplant origin, whose share ranged from 4.8% in2010
to19.3% in2019, an average of20.8 times higher than theglobal indicator, etc. Over‑
all, thegrowth rate ofUkrainian exports ofagricultural, food andore products is out‑
pacing theglobal rate, which indicates fairly stable global demand andtheresilience
ofthese sectors tocrises intheeconomy.
As theanalysis shows, inorder toensure accelerated GDP growth, it is important
forUkraine toincrease theexports ofgoods andservices that provide higher val‑
ue‑added growth. Interms ofthis indicator, themost important export sectors are
12
Trade stascs for internaonal business development. ITC. URL: hps://www.tradem ap.org/
tradestat/Product_SelProduct_TS.aspx (accessed: 4.01.2022).

159
Integraon of Ukraine to the Global Value Chains
agriculture, forestry andsheries (an average of22.8% inexports ofvalue added);
transport, warehousing (an average of18%) andcomputer programming, consulting
andinformation services (an average of8.2%). Also, theproducts ofthemetallurgical
industry (onaverage 8.6% inexports ofvalue added) andthefood, beverage andto‑
bacco industry (onaverage 6.5%) should be added tothis list.
econtent ofimported raw materials inexport output indicates thelevel ofUkrain‑
ian economic integration intotheglobal value chains. Between 2013and2019, this
indicator averaged 19.6%. By sector, thehighest content ofimported raw materials
andcomponents was inthemetallurgical industry andservices inthearea ofcom‑
puter programming, consulting andinformation services. is indicator is also high
forthemachinery andequipment industries; postal andcourier services; metal ore
mining, etc. From 2013–2019 education, healthcare, public administration anddefence
were theleast dependent onimported raw materials andcomponents.
Overall, Ukraine’s export is concentrated, which increases its sensitivity
toshocks.Consequently, its quantities andvalues can uctuate substantially, as shown
by theanalysis. Atthesame time, increasing theshare ofgoods with ahigh level ofpro‑
cessing will increase thestability ofexport earnings.
Inorder tofacilitate Ukraine’s economic integration intoglobal value‑added chains,
it is necessary to: create favourable conditions toattract investments inprojects that
involve theproduction ofnal high‑tech goods; strengthen theprotection ofintellec‑
tual property rights toencourage theimplementation ofpatent‑protected production
facilities inUkraine; foster collaboration between science andbusiness toencour‑
age theinnovation process. is, inturn, requires: improving thelegal andregu‑
latory framework; theimplementation andmonitoring ofprogrammes forresearch
andtechnical activities; intensifying theinternational integration ofscience, produc‑
tion andeducation; amechanism tocoordinate research andtechnical activities; an
eective system forforeign investment attraction; technological support andsecurity;
theharmonisation andstandardisation oftrade procedures; updating thetechnical
regulation system; ensuring integration with theinformation exchange system; bring‑
ing customs law intoline with international standards; theinsurance ofexport credits,
agreements, anddirect investments from Ukraine; acommitment tolocate techno‑
logical production inthehost country by providing supplies tocompanies; investing
inhigh‑tech goods; concluding free trade agreements with countries that are prom‑
ising forthedevelopment ofUkrainian export inhigh‑tech goods; theintroduction
ofinternational experience increating special investment zones with favourable con‑
ditions fordoing business; assistance inpromoting knowledge‑intensive andhigh‑tech
products ontheworld markets, etc.
Overall, theimplementation oftheproposed measures will allow national producers
toactively seek andtake advantage ofopportunities forinclusion inGVCs. Inaddition,
forUkrainian enterprises tobecome intermediate andeven nal links inglobal value
chains, political stability, theunwavering rule oflaw, theestablishment ofquality logis‑
tics infrastructure andeective tari andcustoms regulation are also needed.

160
Vitalii Venger, Nataliia Romanovska, Maryna Chyzhevska
Inour view, theclear andconsistent implementation ofthemeasures outlined above
will create serious competitive advantages andallow Ukrainian high‑tech companies
tooccupy therelevant niches inmany regional andglobal value chains.
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Integracja Ukrainy z globalnymi łańcuchami wartości
W artykule rozważono teoretyczne i metodologiczne podejście do globalnych łań‑
cuchów wartości w procesie pomiaru handlu międzynarodowego. Analizowane są
światowe trendy w obecnym rozwoju handlu międzynarodowego oraz scharakte‑
ryzowano główne wyzwania międzynarodowej polityki handlowej dla Ukrainy.
Stwierdzono, że nowoczesna struktura gospodarki ukraińskiej ukształtowała się pod
wpływem czynników zewnętrznych. Autorzy zakładają, że z biegiem czasu wpływ
gospodarki światowej na dynamikę i strukturę gospodarki ukraińskiej będzie się na‑
silał. Badane są perspektywy integracji Ukrainy z globalnymi łańcuchami wartości,
a autorzy stwierdzili, że struktura ukraińskiego eksportu towarów tylko częściowo
pokrywa się ze strukturą eksportu światowego. Ukraiński eksport towarów charak‑
teryzuje się niskim udziałem wysoko przetworzonych produktów przemysłowych
oraz wysokim udziałem produktów o niskiej wartości dodanej, w szczególności me‑
tali podstawowych oraz produktów przemysłu rolno‑spożywczego. Eksport krajo‑
wych towarów high‑tech stale spada w porównaniu z krajami rozwiniętymi, a jego
udział w światowym eksporcie towarów high‑tech jest znikomy. Aby zapewnić przy‑
spieszenie wzrostu PKB na Ukrainie, ważne jest nie tylko zwiększenie eksportu, ale
także zwiększenie eksportu towarów high‑tech.
Słowa kluczowe: handel międzynarodowy, integracja, globalne łańcuchy wartości,
eksport, import, towary high‑tech
© by the author, licensee University of Lodz – Lodz University Press,
Łódź, Poland. This arcle is an open access arcle distributed under
the terms and condions of the Creave Commons Aribuon license
CC‑BY‑NC‑ND 4.0
(hps://creavecommons.org/licenses/by‑nc‑nd/4.0/)
Received: 15.06.2021. Veried: 10.12.2021. Accepted: 17.02.2022