Factory Europe? Brainier but Not Brawnier

While intermediates comprise the majority of total goods trade in the European Union (EU), their share of total trade has remained flat since 1996. This implies that EU enlargement has had a limited effect on the size of Factory Europe. However, enlargement coincides with an increase in Factory Europe’s complexity. Using two new measures of the complexity of intermediates products, we show that internal EU intermediates trade has become more sophisticated and uses more relationship-specific inputs over time and relative to external EU trade. In other words, Factory Europe has become brainier but not necessarily brawnier. There is also an asymmetry. While the 1995 EU members have not become more significant trading partners for the new members, the new members have become a more important source of intermediates for the EU15 and also a more important market. In sum, the structure of EU trade has changed--not only is the EU15 giving the new members a bigger share of its tasks, it is also giving them harder ones.

Bibliographic Details

Main Authors:	Behar, Alberto, Freund, Caroline
Format:	Background Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2011-04
Subjects:	TARIFFS, GROWTH RATES, HARMONIZATION, TRADE VOLUMES, TRANSPORT SECTOR, CUSTOMS UNION, GRAVITY FRAMEWORK, PATTERN OF SPECIALIZATION, TARIFF RATES, PRODUCTION, SUNK COSTS, AUTOMOTIVE INDUSTRY, BARRIER, MULTINATIONAL CORPORATIONS, REGIONAL TRADE AGREEMENTS, GLOBAL MARKETS, INCOME, INTEREST, VEHICLES, GDP PER CAPITA, CONSUMER GOODS, EXPORTS, TREND, TRADE FLOWS, EXPORTERS, WORLD DEVELOPMENT INDICATORS, WELFARE, ECONOMIC POLICY, NEW PRODUCTS, FREE TRADE AGREEMENTS, BILATERAL TRADE AGREEMENTS, INPUTS, NET EXPORTER, RETURNS TO SCALE, FREE TRADE, CAR INDUSTRY, TRENDS, TRADE AGREEMENTS, FINAL GOODS, INCREASING RETURNS TO SCALE, PREFERENTIAL TRADE AGREEMENTS, LEGAL SYSTEMS, IMPORT DATA, INFLUENCE, TRANSPORT ECONOMICS, TOTAL FACTOR PRODUCTIVITY, ROAD, GLOBAL ECONOMY, COSTS, DEVELOPMENT ECONOMICS, TRANSPORT, NEW PRODUCT, REGIONAL TRADE, CUSTOMS, SPECIALIZATION, PRODUCTIVITY, INCREASING RETURNS, TARIFF REDUCTIONS, ACCESS, INTERNATIONAL ECONOMICS, IMPORTS, TRADE POLICY, TRANSPORT EQUIPMENT, BASKET OF GOODS, INVENTORIES, LEGAL FRAMEWORK, INFRASTRUCTURE, INDUSTRY TRADE, MARKET ECONOMY, PATTERN OF TRADE, BORDER TRADE, CONSUMPTION, PRODUCTIVITY GROWTH, TECHNOLOGICAL CHANGE, DRIVING, VALUE ADDED, TRADE BALANCES, TRAVEL, TRANSIT, WAGES, INTERNATIONAL TRADE, REGIONALISM, ECONOMETRIC ANALYSIS, BARRIERS, TRADE COSTS, CARS, REPUTATION, VALUE, COMPETITIVENESS, WORLD ECONOMY, TRADE DEFICIT, WORKING CAPITAL, INTERMEDIATE GOODS, AGRICULTURE, CONSUMERS, MEASUREMENT, SHARES, INDUSTRIAL PRODUCTS, TRANSACTION COSTS, TRADE DEFICITS, BENCHMARK, TARIFF LEVELS, AUTOMOTIVE SECTOR, CAR SALES, OUTPUT, REGRESSION ANALYSIS, CAPITAL GOODS, CAR, ROAD VEHICLES, TRADE, BILATERAL IMPORTS, GDP, TRADE PARTNERS, GOODS, THEORY, BILATERAL TRADE, VERTICAL SPECIALIZATION, CUSTOMS UNIONS, COMPARATIVE ADVANTAGE, SHARE, PREFERENTIAL TRADE, TARIFF, HIGH TRANSPORT, EXPORT BASKET, MONOPOLISTIC COMPETITION, WORLD TRADE, INTELLECTUAL PROPERTY, TOTAL OUTPUT, CUSTOMERS, INTERMEDIATE INPUTS, TRANSPORT COSTS, ECONOMICS RESEARCH, ROAD TRANSPORT, SOURCING, OUTSOURCING, COMPETITION,
Online Access:	http://documents.worldbank.org/curated/en/2016/04/26228477/factory-europe-brainier-not-brawnier https://hdl.handle.net/10986/24495
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