The Czech automotive industry in global production networks: regional dimensions of upgrading between 1998 and 2008

Abstract

In this article, we draw on the global production networks (GPNs) and global value chains perspectives to examine the regional development effects of economic upgrading in the Czech automotive industry between 1998 and 2008. We investigate how the position of Czech-based automotive firms in GPNs affects the intensity of upgrading and the amount of value captured for the benefit of the host regions through wages, corporate taxes revenues and reinvested profits. Based on the statistical analysis of firm-level data aggregated at the micro-regional level, the intensity of economic upgrading and value capture is measured for groups of regions and for different tiers of the automotive value chain. The results suggest large differences in profitability and value capture between the regions hosting vehicle assembly firms and those hosting component suppliers.