IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa10p583.html
   My bibliography  Save this paper

EU Integration and Production Networks: Evidende from Spain

Author

Listed:
  • Leticia Blazquez

    ()

  • Carmen Diaz-Mora
  • Rosario Gandoy

Abstract

The aim of this paper is to advance knowledge of Spain's participation in international production networks using data on trade in parts and components from 1990 to 2006. Data analysis shows a remarkable dynamism of Spanish trade in P&C, both in imports and exports, being capable of keeping their shares despite the intense competition from less developed countries. Additionally, Spanish participation in networks is mostly in Europe. In fact, Spain has maintained itself as one of the primary destinations of European P&C exports and has been the only economy that has improved its position as a supplier. These facts allow us to infer a significant competitive capacity of the Spanish economy in Europe, for both production and assembly of P&C. The EU enlargement to Eastern European countries seems not to have damaged Spanish competitiveness as an assembler. In order to analyse the nature of Spanish participation in production networks, we estimate the determinants of trade in P&C using an extended gravity panel data model. In addition to the standard variables in gravity models, we also examine the role of differences in technology and factor endowment between Spain and its trading partners, and the role of service link costs in P&C trade. We find that Spain's integration in production networking responds to comparative advantage but also to other factors such as EU membership and a good quality transport and communication infrastructures. Some lessons from the experience of a middle-income country like Spain may be useful for the CEECs, which have increased their presence in European production sharing in the last decade. Future EU enlargement towards lower costs countries could threaten their position in networking. The reinforcement of these other factors, besides comparative advantage, would act as key element to strengthen their participation in cross-border networks. Key Words: international production networks, trade in P&C, Spanish economy, EU, gravity model.

Suggested Citation

  • Leticia Blazquez & Carmen Diaz-Mora & Rosario Gandoy, 2011. "EU Integration and Production Networks: Evidende from Spain," ERSA conference papers ersa10p583, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa10p583
    as

    Download full text from publisher

    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper583.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    2. Deardorff, Alan V., 2001. "Fragmentation in simple trade models," The North American Journal of Economics and Finance, Elsevier, vol. 12(2), pages 121-137, July.
    3. Gene M. Grossman & Elhanan Helpman, 2005. "Outsourcing in a Global Economy," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 135-159.
    4. Jones, Ronald & Kierzkowski, Henryk & Lurong, Chen, 2005. "What does evidence tell us about fragmentation and outsourcing?," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 305-316.
    5. Zeddies, Götz, 2007. "Determinants of International Fragmentation of Production in the European Union," IWH Discussion Papers 15/2007, Halle Institute for Economic Research (IWH).
    6. Kimura, Fukunari & Takahashi, Yuya & Hayakawa, Kazunobu, 2007. "Fragmentation and parts and components trade: Comparison between East Asia and Europe," The North American Journal of Economics and Finance, Elsevier, vol. 18(1), pages 23-40, February.
    7. Feenstra, Robert C, 2002. "Border Effects and the Gravity Equation: Consistent Methods for Estimation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 491-506, December.
    8. Prema-chandra Athukorala, 2005. "Product Fragmentation and Trade Patterns in East Asia," Asian Economic Papers, MIT Press, vol. 4(3), pages 1-27, Fall.
    9. Arndt, Sven W., 1997. "Globalization and the open economy," The North American Journal of Economics and Finance, Elsevier, vol. 8(1), pages 71-79.
    10. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
    11. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 441-487.
    12. Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006. "Production fragmentation and trade integration: East Asia in a global context," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 233-256, December.
    13. Carmen Mora, 2002. "The role of comparative advantage in trade within industries: A panel data approach for the European Union," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(2), pages 291-316, June.
    14. Richard Baldwin & Virginia DiNino & Lionel Fontagné & Roberto A. De Santis & Daria Taglioni, 2008. "Study on the Impact of the Euro on Trade and Foreign Direct Investment," European Economy - Economic Papers 2008 - 2015 321, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    15. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    16. Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
    17. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa10p583. 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: (Gunther Maier). General contact details of provider: http://www.ersa.org .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.