EUROPEAN CHEMICAL INDUSTRY COMPETITIVENESS: HISTORICAL TRENDS AND DEVELOPMENT PROSPECTS

The purpose of the paper is to analyze historical trends and development prospects of the European chemical industry competitiveness. It is concluded that the chemical industry is one of the EU’s most successful spheres, boasting €527 billion in sales in 2013, making it the second-largest global manufacture. Methodology. To explain the competitiveness of the EU chemical branch in the global market, it is proposed the constant-market share methodology to chemical exports coupled with econometric analysis. Results. The constant market share (CMS) approach to assessing competitiveness, developed in the 1970 s for analysis of trade, is based on the principle that changes in the geographic and product structures of exports will affect a country’s export growth relative to that of the world, and that is way its global export market share. There were analyzed the EU biggest exporters (Germany, France, Italy, UK, Spain, Netherlands, Belgium, Poland), the USA, Japan; China, India, Saudi Arabia, Brazil. Practical implication. The analysis presents the results of competitiveness assessment in a different way, showing the average annual growth rate of EU and world chemical exports in the top section and then decomposing the gap between the two into that thanks to growth dynamics (structure effect) and competitive effect. It is defined a lot of factors that are important to industrial competitiveness. On the cost side, in many industries labor is a large enough share of overall production costs that international differences in salaries can have a large bearing on competitiveness. Costs are also affected by a variety of government policies. It is also defined that innovation is one of the most important factors, which opens up new opportunities both in terms of new products and more efficient processes for manufacturing existing products. Value/originality. Given analysis helps to understand the causes and factors that have an impact on the European chemicals competitiveness what gives an opportunity to make forecasts and prospects of the future development of this sector.