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1 Ekonomický časopis (Journal of Economics)

1 2022

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MOTOR VEHICLES INDUSTRY IN SLOVAKIA, 2005 – 2015

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Banerjee B. , Zeman J.

Ekonomický časopis (Journal of Economics)

2022

tom 70

nr 4

307 – 332

This paper examines the evolution of the Slovak motor vehicles sector during 2005 – 2015, drawing on the latest update (December 2018) of OECD’s Inter Country Input-Output (ICIO) model database. The review takes a global value chain (GVC) approach and looks at the linkages from the gross production and value-added perspectives. The overall contribution of the motor vehicles sector to the Slovakia’s gross production and domestic value added increased twofold during the reference period. There was an ongoing change in the structure of the GVC linkages. The reliance on domestically-sourced inputs increased over the years. The (indirect) value added created in the production of domestically sourced inputs gradually approached the level of the (direct) value added generated within the motor vehicles sector. Subsequent to the global financial crisis, the share of intermediate goods in exports, the forward linkage of the GVC, and the up streamness of the production process were all on a rising trend. The sourcing pattern of imports of intermediate inputs and the market for exports steadily shifted away from the euro area towards non-EU countries. It is estimated that a hypothetical 10 percent negative shock to global final demand for motor vehicles would lower Slovak GDP growth by 1 percentage point.