IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Fragmentation, incomes and jobs: an analysis of European competitiveness

  • Marcel P. Timmer
  • Bart Los
  • Robert Stehrer
  • Gaaitzen J. Vries

Increasing fragmentation of production across borders is changing the nature of international competition. It increasingly plays out at the level of activities within industries, rather than at the level of whole industries. As a result, current measures of competitiveness such as export market shares become less informative for the policy debate and new measures are needed. In this paper we study the links between fragmentation and the creation of income and jobs based on a recent multi-sector input-output model of the world economy. Using this model, we measure the income and jobs in a country that are directly and indirectly related to the production of manufacturing goods, called GVC (global value chain) income and jobs. We find that during 1995-2008 growth in GVC income and jobs is much lower than growth in gross exports in all European countries, in particular Germany and Eastern European countries that rely heavily on imported intermediates. We also find that fragmentation does not necessarily lead to destruction of jobs in advanced countries. The number of GVC jobs located in the manufacturing sector declined, but this was more than compensated for by GVC job creation in supporting services in most EU countries. Actually, in 2008, almost half of the jobs related to global manufacturing production were outside the manufacturing sector. We also find a magnification of comparative advantage of EU countries as there is a shift away from activities in GVC production carried out by low-skilled workers towards those carried out by higher skilled workers. Taken together our results show that a GVC perspective on competitiveness provides new measures that can inform the policy debates on globalisation.

(This abstract was borrowed from another version of this item.)

If 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.

File URL: http://hdl.handle.net/10.1111/1468-0327.12018
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by CEPR & CES & MSH in its journal Economic Policy.

Volume (Year): 28 (2013)
Issue (Month): 76 (October)
Pages: 613-661

as
in new window

Handle: RePEc:bla:ecpoli:v:28:y:2013:i:76:p:613-661
Contact details of provider: Postal:
3rd Floor, 77 Bastwick Street, London EC1V 3PZ

Phone: +44 (0)20 7183 8801
Fax: +44 (0)20 7183 8820
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0266-4658
Email:


More information through EDIRC

Postal:

Schackstr. 4, 80539 Munich

Phone: +49 (89) 2180-2748
Fax: +49 (89) 39 73 03
Web page: http://www.cesifo-group.de/portal/page/portal/ifoHome/f-about/f2aboutces
Email:


More information through EDIRC

Postal:

48 boulevard Jourdan - 75014 Paris

Phone: 01 43 13 63 00
Fax: 01 43 13 63 10
Web page: http://www.pse.ens.fr/
Email:


More information through EDIRC

Order Information: Web: http://www.blackwellpublishing.com/subs.asp?ref=0266-4658

References listed on IDEAS
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.:

as in new window
  1. Francois, Joseph & Hoekman, Bernard, 2009. "Services Trade and Policy," CEPR Discussion Papers 7616, C.E.P.R. Discussion Papers.
  2. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, vol. 98(5), pages 1978-97, December.
  3. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
  4. Robert E. Baldwin & Robert E. Lipsey & J. David Richards, 1998. "Geography and Ownership as Bases for Economic Accounting," NBER Books, National Bureau of Economic Research, Inc, number bald98-1, March.
  5. Robert C. Feenstra, . "Integration Of Trade And Disintegration Of Production In The Global Economy," Department of Economics 98-06, California Davis - Department of Economics.
  6. Gianmarco I.P. Ottaviano & Daria Taglioni & Filippo di Mauro, 2009. "The euro and the competitiveness of European firms," Economic Policy, CEPR;CES;MSH, vol. 24, pages 5-53, 01.
  7. Hans-Werner Sinn, 2006. "The Pathological Export Boom and the Bazaar Effect - How to Solve the German Puzzle," CESifo Working Paper Series 1708, CESifo Group Munich.
  8. Baldwin, Richard & Venables, Anthony J, 2010. "Spiders and Snakes: Offshoring and Agglomeration in the Global Economy," CEPR Discussion Papers 8163, C.E.P.R. Discussion Papers.
  9. Kei-Mu Yi, 2000. "Can vertical specialization explain the growth of world trade?," Staff Reports 96, Federal Reserve Bank of New York.
  10. Fagerberg, Jan, 1988. "International Competitiveness," Economic Journal, Royal Economic Society, vol. 98(391), pages 355-74, June.
  11. Andrei A. Levchenko & Jing Zhang, 2012. "Comparative Advantage and the Welfare Impact of European Integration," Working Papers 626, Research Seminar in International Economics, University of Michigan.
  12. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages F374-F403, 06.
  13. Filippo Di Mauro & Katrin Forster, . "Globalisation and the competitiveness of the Euro area," Working Papers 5, Department of the Treasury, Ministry of the Economy and of Finance.
  14. Marcel P. Timmer & Abdul Azeez Erumban & Bart Los & Robert Stehrer & Gaaitzen J. de Vries, 2014. "Slicing Up Global Value Chains," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 99-118, Spring.
  15. Timothy Sturgeon & Johannes Van Biesebroeck & Gary Gereffi, 2008. "Value chains, networks and clusters: reframing the global automotive industry," Journal of Economic Geography, Oxford University Press, vol. 8(3), pages 297-321, May.
  16. Carlo Altomonte & Tommaso Aquilante & Gianmarco Ottaviano, . "The triggers of competitiveness: The EFIGE cross-country report," Blueprints, Bruegel, number 738, June.
  17. Jason Dedrick & Kenneth L. Kraemer & Greg Linden, 2010. "Who profits from innovation in global value chains? A study of the iPod and notebook PCs," Industrial and Corporate Change, Oxford University Press, vol. 19(1), pages 81-116, February.
  18. Marin, Dalia, 2005. "A New International Division of Labor in Europe: Outsourcing and Offshoring to Eastern Europe," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 80, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  19. Johnson, Robert C. & Noguera, Guillermo, 2012. "Accounting for intermediates: Production sharing and trade in value added," Journal of International Economics, Elsevier, vol. 86(2), pages 224-236.
  20. Robert Inklaar & Marcel P. Timmer & Bart van Ark, 2008. "Market services productivity across Europe and the US," Economic Policy, CEPR;CES;MSH, vol. 23, pages 139-194, 01.
  21. Robert C. Feenstra, 2010. "Offshoring in the Global Economy: Microeconomic Structure and Macroeconomic Implications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262013835, June.
  22. Trefler, Daniel & Zhu, Susan Chun, 2010. "The structure of factor content predictions," Journal of International Economics, Elsevier, vol. 82(2), pages 195-207, November.
  23. Erik Dietzenbacher & Bart Los & Robert Stehrer & Marcel Timmer & Gaaitzen de Vries, 2013. "The Construction Of World Input-Output Tables In The Wiod Project," Economic Systems Research, Taylor & Francis Journals, vol. 25(1), pages 71-98, March.
  24. Feenstra, Robert C. & Jensen, J. Bradford, 2012. "Evaluating estimates of materials offshoring from US manufacturing," Economics Letters, Elsevier, vol. 117(1), pages 170-173.
  25. Koopman, Robert & Wang, Zhi & Wei, Shang-Jin, 2012. "Estimating domestic content in exports when processing trade is pervasive," Journal of Development Economics, Elsevier, vol. 99(1), pages 178-189.
  26. Rudolfs Bems & Robert C. Johnson & Kei-Mu Yi, 2011. "Vertical Linkages and the Collapse of Global Trade," American Economic Review, American Economic Association, vol. 101(3), pages 308-12, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bla:ecpoli:v:28:y:2013:i:76:p:613-661. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

or (Christopher F. Baum)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.