A report by Oxford Economics for VCI

Evolution of competitiveness in the German chemical industry: historical trends and future

Germany is still an attractive and a competitive chemical industry location. There are good reasons why German industry is the “export world champion”. But meanwhile, first cracks become apparent. The VCI mandated the researchers Oxford Economics for the study “Evolution of competitiveness in the German chemical industry: historical trends and future prospects”. This study substantiates with facts and figures that the chemical industry location Germany has been losing competitiveness since 2008.

63 Seiten / DIN A4

politics, media, member companies, broad public, target groups

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Purpose of the report

The purpose of this report is to bring evidence-based research to bear on the following questions, about which there are many opinions, but few facts:

  • Has the German chemical sector gained or lost competitiveness over the last 20 years? Which subsectors are driving the changes?
  • What is the quantitative relationship between sector competitiveness and its drivers, and which ones are the most important?

The study fills a gap: Up to now, there was no scientifically comparing analysis regarding the competitiveness of different chemical-producing countries.


In the first part, Oxford Economics quantifies and analyses competitiveness trends in Germany over the past 20 years and compare them to those seen in important chemicalproducing countries in both the developed and developing world. The authors use the constant-marketshare analysis of exports, a well-tested and rigorous methodology for isolating the extent to which patterns in export growth are due to shifts in competitiveness, providing an answer to the first question above.

The authors then analyse trends in the factors that could be potential drivers of national chemical competitiveness, including measures of energy and feedstock prices, labour costs, innovation, capital spending, regulation, and several other factors, again benchmarking the German situation relative to its own past as well as against that faced by other countries.

The final and most important part of the report is econometric analysis that models changes in the competitiveness index developed in the earlier part of the report as a function of factors that the authors believe could be important drivers of competitiveness. The results of this exercise will provide an answer the second question and, more importantly, allow the authors to do scenario analysis of how German chemical sector competitiveness might evolve in the future under alternative assumptions about the drivers.


  1. Executive Summary
  2. Importance of German chemical competitiveness
  3. Measuring competitiveness: the constant market share
    1. Overview of methodology
    2. Strengths and weaknesses
    3. Interpretation of results
  4. German chemical competitiveness in international perspective
    1. Overview of German trade since 1995
    2. Benchmarking Germany against other developed nations
    3. Benchmarking Germany against key emerging markets
    4. Subsector trends and comparisons
  5. Drivers of chemical competitiveness
    1. Identification of potential drivers
    2. International comparison of trends
  6. An econometric model of chemical competitiveness
    1. Overview of methodology
    2. Data description and sources
    3. Estimation approach
    4. Results
  7. Scenario analysis
    1. Descriptions od scenarios
    2. Competitiveness forecasts under alternative assumptions
    3. Potential policy implications
  8. Conclusion
  9. Oxford staff
  10. Appendix charts and tables

Related documents

24-page VCI report (in German language) based on the study by Oxford Economics

Für Fragen und Anregungen nehmen Sie gerne Kontakt mit uns auf.


Jürgen Udwari

E-Mail: udwari@vci.de

Dr. Henrik Meincke

E-Mail: meincke@vci.de