The Importance of Value Chains for Euro Area Trade: A Time Series Perspective

36 Pages Posted: 5 Feb 2020

Date Written: February 4, 2020

Abstract

This paper analyses intra- and extra-euro area (EA) trade flows for the five largest EA countries in order to gauge the importance of value chains. We bridge findings from input-output table analysis with a time series approach. Evidence of value chains is found for all trade patterns and is most pronounced within the EA. Imports from EA and RoW are not only domestically absorbed, but also re-exported. Exports to EA depend on demand in both the importing country and the rest of the world (RoW), indicating the importance of re-exports to RoW. Demand factors play a large role in all trade patterns.

Keywords: global value chains, euro area, trade patterns

JEL Classification: F14, F45

Suggested Citation

Van Limbergen, Duncan and Vermeulen, Robert, The Importance of Value Chains for Euro Area Trade: A Time Series Perspective (February 4, 2020). De Nederlandsche Bank Working Paper No. 672, February 2020, Available at SSRN: https://ssrn.com/abstract=3531597 or http://dx.doi.org/10.2139/ssrn.3531597

Duncan Van Limbergen

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Robert Vermeulen (Contact Author)

De Nederlandsche Bank ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

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