Import intensities of final demand components and their implications for economic openness: The case of the Czech Republic

Abstract

The article deals with the estimation of import intensities of exports, final consumption expenditures and gross fixed capital formation. It uses the input-output methodology of computing direct and indirect imports to the final demand components, which compares with regression estimates. Unlike the widely used turnover approach, the results contribute fundamentally to knowledge about the genuine openness of the Czech economy with regard to how much value-added is exported. In 2015, the highest import intensity for exports amounting to 52%, closely followed by 49% for investments. Household consumption worked with 41% import intensity, while general government consumption expenditures showed the lowest import intensity of 16%. Based on our input-output findings, the true openness of the Czech economy can be revealed. While turnover of exports to GDP reached 80% in 2019, the value-added approach showed only a half, i.e., 40% value-added was exported. It implies a contra-intuitive conclusion that even in a relatively small and highly integrated country into the globalized economy, there is a 60% majority of the non-tradeable goods.

A Generalization of the Grey Lotka–Volterra Model and Application to GDP, Export, Import and Investment for the European Union

“…Thus, it is found that Export have a positive impact on economic growth, results also found by other authors [38,39]. Through the GLV(4) model, it is found that the increase in Export accelerates not only economic growth, but also the ability to Import and make Investment, results also found by other studies [34,41,49].…”

“…For the period 2011-2022 there is a relationship of type Predator-Prey, while for 2005-2022 the relationship is of type Competition. It is found, as in other studies, that in the long term the coexistence between Import and Investment is also influenced by the evolution of Export and economic growth [49].…”

“…Analysis of the relationship between exports, imports and GDP indicates that imports significantly promote economic growth, while GDP growth stimulates export growth [47]. At the same time, some studies have found that imports have a greater effect on production growth than exports [48,49]. The increase in exports contributes to the increase in imports because it builds up foreign exchange reserves used to pay for imports.…”