Trade openness and international fragmentation of production in the European Union: the new divide?
AbstractThis paper analyses the relationship between international fragmentation of production, trade openness and global export performance in the European Union from 2000 to 2009. As most trade models featuring international production sharing show, the higher the level of fragmentation and related international openness the better the export performance of a country. Our econometric analysis confirms this hypothesis. We estimate an error correction model based on panel data on the EU Member States and find that inter-European fragmentation and openness significantly improve their long-run export performance. Policy implications could be that restrictive policies preventing firms from internationalizing production would weaken a country’s position in global production networks, with long-term negative effects on domestic jobs and growth.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 855.
Date of creation: Feb 2012
Date of revision:
international fragmentation of production; trade openness; export performance; European Union;
Other versions of this item:
- Paolo Guerrieri & Filippo Vergara Caffarelli, 2012. "Trade Openness and International Fragmentation of Production in the European Union: The New Divide?," Review of International Economics, Wiley Blackwell, vol. 20(3), pages 535-551, 08.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-21 (All new papers)
- NEP-EEC-2012-03-21 (European Economics)
- NEP-INT-2012-03-21 (International Trade)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hiroyuki Kasahara & Beverly Lapham, 2006.
"Import Protection as Export Destruction,"
University of Western Ontario, Economic Policy Research Institute Working Papers
20062, University of Western Ontario, Economic Policy Research Institute.
- Stephan Danninger & Fred Joutz, 2007.
"What Explains Germany’s Rebounding Export Market Share?,"
CESifo Working Paper Series
1957, CESifo Group Munich.
- Stephan Danninger & Fred Joutz, 2008. "What Explains Germany's Rebounding Export Market Share?," CESifo Economic Studies, CESifo, vol. 54(4), pages 681-714, December.
- Frederick L. Joutz & Stephan Danninger, 2007. "What Explains Germany's Rebounding Export Market Share?," IMF Working Papers 07/24, International Monetary Fund.
- Arndt, Sven W. & Kierzkowski, Henryk (ed.), 2001. "Fragmentation: New Production Patterns in the World Economy," OUP Catalogue, Oxford University Press, number 9780199243310, October.
- Bas, Maria & Strauss-Kahn, Vanessa, 2010.
"Does importing more inputs raise exports? Firm level evidence from France,"
27315, University Library of Munich, Germany.
- Maria Bas & Vanessa Strauss-Kahn, 2011. "Does Importing more Inputs Raise Exports? Firm Level Evidence from France," Working Papers 2011-15, CEPII research center.
- Pesaran, M. Hashem & Smith, Ron, 1995.
"Estimating long-run relationships from dynamic heterogeneous panels,"
Journal of Econometrics,
Elsevier, vol. 68(1), pages 79-113, July.
- Pesaran, M.H. & Smith, R., 1992. "Estimating Long-Run Relationships From Dynamic Heterogeneous Panels," Cambridge Working Papers in Economics 9215, Faculty of Economics, University of Cambridge.
- Luca De Benedictis & Lucia Tajoli, 2008. "Similarity in trade structures, integration and catching-up," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(2), pages 165-182, 04.
- Emanuele Breda & Rita Cappariello & Roberta Zizza, 2008.
"Vertical specialisation in Europe: Evidence from the import content of exports,"
Temi di discussione (Economic working papers)
682, Bank of Italy, Economic Research and International Relations Area.
- Emanuele Breda & Rita Cappariello & Roberta Zizza, 2007. "Vertical Specialisation in Europe: Evidence from the Import Content of Exports," Rivista di Politica Economica, SIPI Spa, vol. 97(3), pages 189, May-June.
- Kaminski, Bartlomiej & Ng, Francis, 2005. "Production disintegration and integration of Central Europe into global markets," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 377-390.
- Judith M. Dean & K. C. Fung & Zhi Wang, 2011. "Measuring Vertical Specialization: The Case of China," Review of International Economics, Wiley Blackwell, vol. 19(4), pages 609-625, 09.
- Dieter Ernst & Paolo Guerrieri, 1997. "International Production Networks And Changing Trade Patterns In East Asia The Case Of The Electronics Industry," DRUID Working Papers 97-7, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Prettner, Catherine & Prettner, Klaus, 2014. "How interdependent are Eastern European economies and the Euro area?," Center for European, Governance and Economic Development Research Discussion Papers 187, University of Goettingen, Department of Economics.
- Luigi Bonatti & Andrea Fracasso, 2013. "The German Model and the European Crisis," Journal of Common Market Studies, Wiley Blackwell, vol. 51(6), pages 1023-1039, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.