The role of regions in global value chains: an analysis for the European Union

Abstract

While considerable attention has been directed to the national-level impacts of global value chains, far less attention has been focused on the way in which global production fragmentation has affected regional economies. Using some measures derived from a multiregional, multisectoral input-output model, this paper analyzes the position and share of EU regions in Global Value Chains (GVC). The spatial determinants of these two dimensions are explored using spatial econometric methods to capture the influence of neighboring regions on these outcomes. Empirically, the focus is on a set of NUTS2 European regions for the most recent year (2010) of the EUREGIO database. Our results confirm the hypothesis of spatial dependence between regions conditioning the engagement and position GVCs, suggesting that global production processes are influenced by regional and local factors. In particular, spatial spillover effects play a significant role conditioned by both geographical proximity and similarity of production structures. The results show that sharing certain characteristics, some of them associated to their degree of proximity and the neighbouring situation of regions condition their specialization, participation and positioning in GVC, generating some

European multi regional input output data for 2008–2018

“…The classic approach for estimating trade flows in the literature starts from the largest spatial scale -the global trade networks -studied through Multi-Regional Input-Output (MRIO) tables and global trade-flow databases. However, this coarse level of analysis does not provide direct insights about the domestic and cross-border trade flows at the sub-national level 1,2 . This situation creates a gap between the information that describes the structure of the sub-national economy, and the top-down information of Inter-Country Input-Output (ICIO) tables used to understand these regional economic characteristics.…”

The European regions in the global value chains: New results with new data

“…In this work, we follow Bolea et al (2022) who defined the participation of a region in GVCs as the portion of the total VA that is embodied-exported and modified the version of Los et al (2015), where the participation of a region in GVCs is defined as the share of value added embodiment (VAE) in exports over the world total. The version of Bolea et al (2022) takes into account the region's size (Duarte et al, 2022;Espinosa-Gracia et al, 2023), and we consider it more useful for our purpose.…”

New insights on the relationship between the involvement of countries in global value chains, and intra- and inter-country inequalities

“…Second, the involvement of country r in GVCs can be also calculated within this MRIO framework, following Bolea et al (2022) as follows:…”

“…This degree of participation can either be captured in different ways. For instance, being related to the country's per capita GDP (Los et al, 2015), approaching in this way the benefits of trade openness; over global value added, which would be a measure of the country's competitiveness (Bolea et al, 2022); or by using backward and forward linkages, which would respectively indicate participation and strength of imports and exports relationships (Szymczak and Wolszczak-Derlacz, 2022).…”