Canadian Pharmaceutical Industry in Global Value Chains: Influence of Dominant Trading Partner

751
DOI: 10.20542/0131-2227-2019-63-4-14-21

O. Klochko (oklochko@hse.ru),
National Research University Higher School of Economics, 20, Myasnitskaya Str., 101000, Moscow, Russian Federation;
I. Manuilov (ilya.manujlov@gmail.com),
National Research University Higher School of Economics, 20, Myasnitskaya Str., 101000, Moscow, Russian Federation

Acknowledgements. The Research is supported by the grant of the School of World Economy and International Affairs at National Research University  – Higher School of Economics No. 1-2019 “Corporate Strategies of International Companies under Global Value Chain Transformation”.


Abstract. Participation of a country in global value chains is highly dependent on types of interaction with its major trading partners. The purpose of current research is to uncover the US influence on the Canadian pharmaceutical industry insertion into global value chains. The first part of the analysis is devoted to key trends of the US and Canadian pharmaceutical industries development under the expansion of global value chains. As a result, the following hypotheses are investigated: (1) Canada’s participation in pharmaceutical value chains is mostly regional other than global; (2) Canada’s regional value added is primarily generated through cooperation with the US pharmaceutical sector; (3) dominant positions of the US corporations on the world as well as Canadian pharmaceutical markets stifle Canada’s integration into global value chains. The second part of the research describes the quantitative approach to the hypotheses testing. For instance, data from the World Input-Output Database is used to calculate the origin of value added based on the geography and product type (national and foreign value added in the exports of final and intermediate goods). The final part of the paper deals with the data interpretation and contains conclusions. Namely, it was found that pharmaceutical GVCs in North America are in fact regional for most countries and Canada is not the exception (first hypothesis proved). Further, foreign value added content of Canadian pharmaceutical exports is primarily generated in the US (second hypothesis proved). At the same time, the last hypothesis has not gained support in current research. The share of foreign value added growth during the period of 2002–2014. Thus, it can be stated that Canada has a positive experience of integration into GVCs under dominant trading partner.

Keywords: global value chains, international trade, Canada, USA, pharmaceutical sector


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For citation:
Klochko O., Manuylov I. Canadian Pharmaceutical Industry in Global Value Chains: Influence of Dominant Trading Partner. World Eonomy and International Relations, 2019, vol. 63, no. 4, pp. 14-21. https://doi.org/10.20542/0131-2227-2019-63-4-14-21



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