New Dimensions of Core-Periphery Relations in an Economically Integrated Europe: The Role of Global Value Chains

Abstract

This paper presents research conducted within the Competitiveness Research Network (CompNet). The network is composed of economists from the European System of Central Banks (ESCB) -i.e. the 28 national central banks of the European Union (EU) and the European Central Bank -a number of international organisations (World Bank, OECD, EU Commission) universities and think-tanks, as well as a number of non-European Central Banks (Argentina and Peru) and organisations (US International Trade Commission).The objective of CompNet is to develop a more consistent analytical framework for assessing competitiveness, one which allows for a better correspondence between determinants and outcomes.The research is carried out in three workstreams: 1) Aggregate Measures of Competitiveness; 2) Firm Level; 3) Global Value Chains CompNet is chaired by Filippo di Mauro (ECB). Workstream 1 is headed by Chiara Osbat, Giovanni Lombardo (both ECB) and Konstantins Benkovskis (Bank of Latvia); workstream 2 by Antoine Berthou (Banque de France) and Paloma Lopez-Garcia (ECB); workstream 3 by João Amador (Banco de Portugal) and Frauke Skudelny (ECB). Julia Fritz (ECB) is responsible for the CompNet Secretariat.The refereeing process of CompNet papers is coordinated by a team composed of Filippo di Mauro (ECB), Konstantins Benkovskis (Bank of Latvia), João Amador (Banco de Portugal), Vincent Vicard (Banque de France) and Martina Lawless (Central Bank of Ireland).The paper is released in order to make the research of CompNet generally available, in preliminary form, to encourage comments and suggestions prior to final publication. The views expressed in the paper are the ones of the author(s) and do not necessarily reflect those of the ECB, the ESCB, and of other organisations associated with the Network.

The import content of Croatian economic sectors and final demand

“…The empirical findings of this study were compared with results available for the other European economies. Existing literature on economic internationalisation usually focuses on EU27 economies or the group of new member-states (Amador, Cappariello, & Stehrer, 2015;Grodzicki & Geodecki, 2016;Ederer & Reschenhofer, 2016;Breda, Cappariello, & Zizza, 2008), while the Croatian economy 1 is rarely included in the sample (Kersan-Skabi c, 2017). The results of this study provide additional evidence for the level of international integration of Croatia's economy and discuss the position of Croatia within the sample of selected NMS (new member-states) economies.…”

“…Most studies conclude that a high share of import content is not generally perceived as a weakness, but rather as an indicator of the level at which domestic producers have achieved international integration in global value-added chains (Amador, Cappariello, & Stehrer, 2015;Grodzicki & Geodecki, 2016). However, improving the international competitiveness of domestic producers is the key prerequisite to ensuring an external stability in an environment of trade liberalisation and growing international integration (Ederer & Reschenhofer, 2016;Breda, Cappariello, & Zizza, 2008).…”

“…Export growth and the degree of vertical specialisation have a positive relation. Grodzicki and Geodecki (2016) explained the core-periphery model in Europe and concluded that participation in GVCs speeds up the process of deindustrialisation. Croatia is not included in the sample of research which covers the period prior to the country's accession to the EU.…”

The drivers of global value chain (GVC) participation in EU member states

“…The existing literature is focused on the analysis of GVC participation or position. The EU as a whole, or selected EU members, are analysed, among others, by Amador, Cappariello and Stehrer (2015), Leitner and Stehrer (2014), Cieslik, Bieganska and Sroda-Murawska (2016), Grodzicki and Geodecki (2016), Timmer et al (2013), Timmer et al (2016). Amador, Cappariello and Stehrer (2015) found that in 2011 GVCs for the euroarea members (taken as a whole) were very important (as important as in China and more important than in the U.S. and Japan).…”

“…In addition, they found the highest internationalisation in transport equipment and electronics where some of the countries were among the global leaders in the upstream segment. Grodzicki and Geodecki (2016) explain the core-periphery model in Europe based on the contribution of particular groups of countries to the value chain. They warn that GVC participation accelerates deindustrialisation processes and that the CEE countries are in a better position than the Southern countries, but this is due their continued dependence on foreign capital and technologies.…”