Functional specialisation in trade

Marcel Timmer, Sébastien Miroudot and Gaaitzen de Vries

Journal of Economic Geography, 2019, vol. 19, issue 1, 1-30

Abstract: Production processes are fragmenting across borders with countries trading tasks rather than products. Export statistics based on value added reveal a process of vertical specialisation. Yet, what do countries do when exporting? In this article, we provide novel evidence on functional specialisation (FS) in trade. We find surprisingly large and pervasive heterogeneity in specialisation across countries. A positive (negative) correlation between GDP per capita and specialisation in R&D (fabrication) functions is documented. Specialisation in management and marketing functions is unrelated to income. We show how our approach can be easily extended to study FS in trade at the sub-national level. We argue that this is needed to better understand the potential for regional development under global integration.

Keywords: Specialisation; international trade; functions; global production; networks (search for similar items in EconPapers)
JEL-codes: F14 F60 O19 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (80)

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