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Can value chain integration explain the diverging economic performance within the EU?

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Listed:
  • Andreas Reinstaller

    (Office of the Austrian Productivity Board)

  • Agnes Kügler

    (Austrian Institute of Economic Research (WIFO))

  • Klaus Friesenbichler

    (Austrian Institute of Economic Research (WIFO))

Abstract

This paper studies the interplay of integration into EU value chains and industrial development measured by labour productivity. Our integration indicator measures value chain trade within the Single Market relative to global value chain networks. Using a simultaneous equation model, we find an overall positive effect of integration on labour productivity, which is driven by upstream integration. Highly productive industries rather seek global value chain trade than regional integration, though. Better domestic institutions facilitate EU integration, although they favour industries with less complex product portfolios and lower levels of knowledge cumulativeness.

Suggested Citation

  • Andreas Reinstaller & Agnes Kügler & Klaus Friesenbichler, 2022. "Can value chain integration explain the diverging economic performance within the EU?," Research Papers 0123, Büro des Produktivitätsrates.
    • Handle: RePEc:bpr:respap:0123
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    Cited by:

    1. Klaus S. Friesenbichler & Agnes Kügler & Andreas Reinstaller, 2021. "The Impact of Import Competition from China on Firm-level Productivity Growth in the EU," WIFO Working Papers 623, WIFO.

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    More about this item

    Keywords

    EU integration; value chains; productivity; institutions; industrial development; product complexity;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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