Threshold Effects of Import Dependence on Domestic Output and GVA Multipliers across Ukraine’s Economic Sectors
This study examines how import dependence, measured as the imported inputs’ share of intermediate consumption, affects the domestic output and gross value added (GVA) multipliers across Ukraine’s economic activities. By using OECD national input–output tables for 1995–2022, two individual dynamic threshold regressions are estimated for each of 49 activities, with activity-specific lags and deterministic trends. A common threshold for both multipliers is identified empirically rather than imposed a priori.
The relationship is nonlinear: below the threshold, higher import dependence raises the multipliers or has no statistically significant effect; above it, both decline. Estimated thresholds range from 6.79% in forestry and logging to 37.47% in coke and refined petroleum products. In 2022, 42 of 49 activities exceeded their thresholds, thus indicating a widespread cross-sectoral pattern.
The analysis establishes three economic regularities. First, the threshold at which imported inputs cease to support domestic production and begin to displace it is common to both multipliers, linking weaker intersectoral production effects to a reduced domestic value added. Second, the wide dispersion of thresholds calls for sector-differentiated rather than aggregate localisation policy. Third, lags of zero to three years reveal differing transmission horizons for changes in import dependence. These findings provide activity-specific guidance for Ukraine’s post-war reconstruction.
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