FEATURES OF UKRAINE’S PARTICIPATION IN INTERNATIONAL CONTRACTUAL RELATIONS

• Main Authors: Tetiana Melnyk, Liudmyla Kudyrko, Liliia Samsonova
• Format: Article
• Language: English
• Published: Izdevnieciba “Baltija Publishing” 2018-01-01
• Series: Baltic Journal of Economic Studies
• Subjects: contractual relations; international cooperation; global production networks; subordinate production; theory of comparative advantages; Ukraine
• Online Access: http://www.baltijapublishing.lv/index.php/issue/article/view/361/pdf

The article highlights theoretical and practical aspects of economic rivalry escalation between countries in the process of deepening international economic relations, which are not mediated by investments. The purpose of the research is to summarize the empirical data and theoretical developments of the determinants, macroeconomic effects, and peculiarities of the countries’ participation in international production and marketing cooperation through the format of non-investment contractual relations and investigate their potential for Ukrainian enterprises. The subject of the research is contractual relations as an instrument for incorporating the country’s enterprises into global value chains. Methodology. Assessment of competitive advantages of countries integrated into the international subordinate production was carried out using the techniques of Vollrath T.L. and G. Lafay. Results. Based on the generalization of empirical data and theoretical studies on the latest trends in deepening economic rivalry among participants in international cooperative relations, there were found out factors of activation of non-investment forms of external expansion by TNCs, in particular, the exhaustibility of the extensive way of cross-border production development and investment, and the increased level of investment risks caused by permanent economic crises, political instability, corruption of local elites in the countries where TNC units are localized, regional military conflicts. Estimation of the level of comparative advantages according to Vollrath T.L. and G. Lafay approaches made it possible to identify the competitive positions of the producers of individual countries in the system of international cooperation. Estimation shows that among 41 tested countries, the most significant index of the identified comparative advantages in production under contract was demonstrated by the following countries: Bangladesh, Bolivia, Bosnia and Herzegovina, Paraguay, Romania, South Korea, Hungary, Poland. Additional testing according to the criteria values of the Lafay index confirmed the list of countries with the highest level of advantages Honduras, El Salvador, Nicaragua, Poland, Romania, Morocco, Malaysia, Hungary, Czech Republic, China, Bolivia, and Albania. Assessment of the state and potential for the development of international cooperative relations for Ukraine allowed us to identify a number of destructive factors, in particular, the lack of a relevant legal framework for contractual relations and the instability of the political and economic situation in the country. Practical implications. Possibilities for deepening the participation of Ukrainian enterprises in the contractual relationship system are related to their resource and technological comparative advantages, in particular, the availability of free production facilities, a relatively high level of production processes automation in comparison with selected African and Asian countries; availability of skilled labour force with its relatively low cost to the customer countries. Value/originality. The study of the Ukrainian enterprises’ participation in the system of international cooperation and the definition of sectoral specifics in the use of cross-border contractual relations make it possible to identify the problems of macroeconomic effects for the national economy.