International Fragmentation of Production, Trade and Growth: Impacts and Prospects for EU Member States

Neil Foster-McGregor, Robert Stehrer and Marcel Timmer

No 387, wiiw Research Reports from The Vienna Institute for International Economic Studies, wiiw

Abstract: There has been an ongoing trend towards increasing internationalisation of production over the past two decades or so. This implies that countries become more dependent on demand from foreign countries but also that countries and industries are able to source intermediates from different countries, an activity referred to as ‘offshoring’. Whereas the former aspect means an increasing dependency on foreign markets, the second aspect implies that countries and industries source at lower costs making them more productive and competitive. Using the World Input-Output Database (WIOD) we first provide an overview of these trends over the period 1995-2011 for 40 advanced and emerging countries with a specific focus on the EU as a whole and the individual EU member states. In the second part of the paper we show results from an econometric analysis to explain growth performance, focusing on the impacts of the increasing internationalisation of production.

Keywords: international fragmentation of production; growth; employment; trade (search for similar items in EconPapers)
JEL-codes: E20 F15 F43 F62 (search for similar items in EconPapers)
Pages: 50 pages including 27 Tables and 14 Figures
Date: 2013-05
New Economics Papers: this item is included in nep-eur, nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Working Paper: International fragmentation of production, trade and growth: Impacts and prospects for EU member states (2013)
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