International division of labour and countries’ competitiveness: the case of Italy and Germany

Garbellini, Nadia (2014): International division of labour and countries’ competitiveness: the case of Italy and Germany.

Abstract

The paper is going to use the WIOD to analyse the structure, extent and evolution of production processes outsourcing in Italy and Germany from 1995 to 2011 by means of global vertically integrated sectors, in order to single out and compare the different sources of gains/losses in competitiveness.

Secondly, global vertically integrated sectors are going to be employed to get a measure of labour productivity changes in the two countries. By comparing the trends of these two sets of indicators, it is possible to shed light on the evolution of international competitiveness in the two countries, to assess the extent to which competitiveness gains/losses are associated to actual productivity increases/decreases and to what extent they are simply due to a different geographical allocation of production stages.

• Item Type: MPRA Paper
• Language: English
• Keywords: Labour productivity, International fragmentation of production, offshoring
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R15 - Econometric and Input-Output Models ; Other Models

References

Ayhan Kose, M., Yi, K., 2001. Trade and business cycles: Is vertical specialization the missing link? The American Economic Review 91 (2), 371–375.

Bems, R., Johnson, R., Yi, K., 2010. Demand spillovers and the collapse of trade in the global recession. IMF Economic Review 58 (2), 295–326.

Bems, R., Johnson, R., Yi, K., 2011. Vertical linkages and the collapse of global trade. American Economic Review: Papers and Proceedings 101 (3), 308–312.

Breda, E., Cappariello, R., 2012. A tale of two bazaar economies: an input-output analysis of Germany and Italy. Economia e Politica Industriale 39 (2).

Dietzenbacher, E., 2010. Vertical specialization in an intercountry input-output framework. Lett Spat Resour Sci 3, 127–136.

Egger, H., Egger, P., 2003. The impact of outsourcing and high-technology capital on wages: estimates for the united states, 1979-1990. Applied Economics Quarterly 1 (49), 49–64.

Feenstra, R., G.H., H., 1996. Globalization, outsourcing, and wage inequality. AEA Papers And Proceedings 2 (86), 240–245.

Feenstra, R., G.H., H., 1999. The impact of outsourcing and high-technology capital on wages: estimates for the united states, 1979-1990. Quarterly Journal of Economics 3 (114), 907–940.

Garbellini, N., Marelli, E., Wirkierman, A., 2014. Domestic demand and global production in the eurozone: A multi-regional input-output assessment of the global crisis. International Review of Applied Economics (forthcoming).

Garbellini, N., Wirkierman, A., 2014. Productivity accounting in vertically (hyper-)integrated terms: Bridging the gap between theory and empirics. Metroeconomica 65 (1), 154–190.

Hummels, D.and Ishii, J., Yi, K., 2001. The nature and growth of vertical specialization in world trade. Journal of International Economics 54, 75–96.

Johnson, R., July 2012. Trade in intermediate inputs and business cycle comovement. Working Paper 18240, NBER.

Johnson, R., Noguera, G., 2012. Accounting for intermediates: Production sharing and trade in value added. Journal of International Economics 86, 224–236.

Koopman, R., Powers, W., Wang, Z., Wei, S., 2010. Give credit where credit is due: Tracing value added in global production chains. Working Paper 16426, NBER.

Leontief, W., 1953. Interregional theory. In: Studies in the Structure of the American Economy — Theoretical and Empirical Explorations in Input-Output Analysis. Oxford University Press.

Leontief, W., Strout, A., 1963. Multiregional Input-Output Analysis. In: Barna, T. (Ed.), Structural Interdependence and Economic Development. St-Martin’s Press, New York, pp. 119–150.

Meng, B., Inomata, S., 2009. Production networks and spatial economic interdependence: An international input-output analysis of the asia-pacific region. IDE Discussion Paper 185, Institute of Developing Economies.

Meng, B., Yamano, N., Webb, C., 2011. Application of factor decomposition techniques to vertical specialisation measurements. IDE Discussion Paper 276, Institute of Developing Economies.

Rampa, G., 1986. Effetti reali dell’integrazione fra italia e resto della cee. Studi e Informazioni 3, 101–116.

Rampa, G., Bertoletti, P., 1990. Integrazione, interdipendenza e vincolo estero in un modello multiregionale per la cee. In: Cimoli, M., Musu, I. (Eds.), Cambiamento strutturale ed asimmetria nell’economia italiana. F. Angeli, Milano, pp. 313–372.

Rampa, G., Lanza, A., 1988. A model for assessing the growth opportunities of eec countries when interdependence is not ruled out. In: Ciaschini, M. (Ed.), Input Output Analysis: Current Developments. Chapman & Hall, London, pp. 367–390.

Timmer, M. (Ed.), 2012. The World Input-Output Database (WIOD): Contents, Sources and Methods. WIOD Working Paper Nro. 10, available at: http://www.wiod.org.

Wang, Z., Powers, W., Wei, S., 2009. Value chains in east asian production networks — an international input-output model based analysis. Working Paper 2009-10-C, U.S. International Trade Commission.