No. 10 (February 2016): Trade in parts and components across Europe

With the rise of global value chains, trade in intermediates now accounts for more than two-thirds of total trade. This column provides evidence that trade in parts and components of capital goods between new and old EU countries is driven by wage differences across countries. It further shows that wage differences play an especially important role in the ex ante investment decision to establish a new production network. | Downlad (PDF, 300 KB)