Functional upgrading and downgrading in global value chains: The role of complementary interregional value chain linkages in EU regions

Eduardo Hernandez-Rodriguez, Ron Boschma (), Andrea Morrison and Xianjia Ye

No 2432, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: This paper studies the role of complementary interregional value chain linkages in functional upgrading and downgrading in global value chains in EU regions. It adopts an evolutionary approach to assess functional upgrading and downgrading using relatedness and economic complexity metrics. The empirical analysis of 199 EU regions between the years 2000-2010 shows that, while local capabilities remain crucial, complementary interregional value chain linkages increase (decrease) the likelihood of functional upgrading (downgrading) in GVCs. Regions engaged in GVCs in which partner regions offer complementary capabilities are more likely to specialise in more complex functions and to retain such specialisations over time. By doing so, this paper proposes a new theoretical-analytical framework to identify partner regions that can offer complementary capabilities in GVCs.

Keywords: Global value chains; upgrading/downgrading; interregional linkages; complementary capabilities; EU regions (search for similar items in EconPapers)
JEL-codes: F14 F63 O19 R11 R12 (search for similar items in EconPapers)
Date: 2024-10, Revised 2024-10
New Economics Papers: this item is included in nep-geo, nep-hme, nep-int and nep-tid
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