Grant detail

GAUK 1028218: Global Value Chains, Technology Diffusion, and Wage Distribution: Evidence from the World Input-Output Tables

Principal investigator: Petr Pleticha
Description: Although recent economic and political development suggests a slowdown in the world economic integration, the current state of global interrelatedness is nonetheless unprecedented. Such interrelatedness leads to vertical specialization of countries in global value chains (GVC) which, in turn, should generally cause higher productivity. This should be also reflected in wages but, to the author’s knowledge, the direct link connecting GVC and wage distribution has not been analyzed.

The aim of this study is twofold. Firstly, it is to test the relationships between productivity, GVC participation and channels of technology dissemination. The central hypothesis of this part is that although GVC participation should provide a significant boost to labor productivity, it mainly reflects underlying technological progress in the economy. Secondly, the study will investigate the relationship between GVC participation and wage distribution. Standard economic theory relates wages to labor productivity. Productivity might be the main channel through which GVC affect wages, but it does not have to be the only one. GVC participation brings about intensified foreign competition, which can depress wages in certain sectors but boost them in other sectors. Testing which effect is pronounced in which stratum of labor force will be the main purpose of the second part of the study.
Work in grant:
Web link:
Finance: Submitted in November 2017
End date: 2020




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