Trade openness and international fragmentation of production in the European Union: the new divide?
This 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 countryï¿½s position in global production networks, with long-term negative effects on domestic jobs and growth.
|Date of creation:||Feb 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.bancaditalia.it
More information through EDIRC
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.:
- 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.
- 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.
- 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.
- Arndt, Sven W. & Kierzkowski, Henryk (ed.), 2001. "Fragmentation: New Production Patterns in the World Economy," OUP Catalogue, Oxford University Press, number 9780199243310, March.
- 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.
- 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.
- Beverly Lapham & Hiroyuki Kasahara, 2005.
"Import Protection as Export Destruction,"
2005 Meeting Papers
528, Society for Economic Dynamics.
- 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.
- 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.
- Stephan Danninger & Fred Joutz, 2007. "What Explains Germany’s Rebounding Export Market Share?," CESifo Working Paper Series 1957, CESifo Group Munich.
- 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.
- Maria Bas & Vanessa Strauss-Kahn, 2011.
"Does Importing more Inputs Raise Exports? Firm Level Evidence from France,"
2011-15, CEPII research center.
- Maria Bas & Vanessa Strauss-Kahn, 2014. "Does importing more inputs raise exports? Firm-level evidence from France," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 150(2), pages 241-275, May.
- Bas, Maria & Strauss-Kahn, Vanessa, 2010. "Does importing more inputs raise exports? Firm level evidence from France," MPRA Paper 27315, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:bdi:wptemi:td_855_12. 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: ()
If references are entirely missing, you can add them using this form.