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International fragmentation of production, trade and growth: Impacts and prospects for EU member states.

Neil Foster, Robert Stehrer, Marcel Timmer

International fragmentation of production, trade and growth: Impacts and prospects for EU member states. pdf(2 MB) Choose translations of the previous link 

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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.

(European Economy. Economic Papers. 484. April 2013. Brussels. PDF. 55pp. Tab. Bibliogr. Free.)

KC-AI-13-484-EN-N (online)
ISBN 978-92-79-28566-0 (online)
doi:10.2765/42578 (online)

JEL classification: E20, F15, F43, F62

Economic Papers are written by the staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis. The views expressed are the author’s alone and do not necessarily correspond to those of the European Commission.

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