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International Fragmentation of Production and the Labour Input into Germany’s Exports – An Input-Output-Analysis

Author

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  • Brautzsch, Hans-Ulrich
  • Ludwig, Udo

Abstract

The import penetration of exports has become a topic of public debate, particularly in the context of Germany's position as one of the world's leading exporters. The growth in the volume of intermediate products purchased from abroad for subsequent processing into export goods in Germany seems to be undermining the importance of exports as a driver of domestic production and employment. The gains that arise from an increase in exports seem to have been offset by the losses caused by the crowding out of local production by imports. Empirical evidence on the impact of this international integration of the goods market on the German labour market is ambiguous. Short-term negative effects on employment are claimed to be offset by the long-term benefit that the jobs lost in the short run will eventually be replaced by higher-skilled jobs with better perspectives. Against this background, the following hypothesis is tested empirically: Germany is poor in natural resources, but rich in skilled labour. In line with the Heckscher- Ohlin theory, Germany should therefore specialize in the production of export goods and services that are relatively intensive in these factors and should import those goods and services that are relatively intensive in unskilled labour ...

Suggested Citation

  • Brautzsch, Hans-Ulrich & Ludwig, Udo, 2011. "International Fragmentation of Production and the Labour Input into Germany’s Exports – An Input-Output-Analysis," IWH Discussion Papers 14/2011, Halle Institute for Economic Research (IWH).
  • Handle: RePEc:zbw:iwhdps:iwh-14-11
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    Cited by:

    1. Fujii Gambero, Gerardo & Cervantes M., Rosario & Fabián Rojas, Ana Sofía, 2016. "The labour content of Mexican manufactures, 2008 and 2012," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

    More about this item

    Keywords

    international trade; labour and skills market interactions; input-outputmodels; Außenhandel; Arbeitsmärkte; Qualifikation; Input-Output-Modelle;

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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