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Incomplete specialization and offshoring across Europe

Author

Listed:
  • Richard Frensch

    (IOS Regensburg)

  • Jan Hanousek
  • Evžen Kočenda
Abstract
Research for evidence on offshoring activities and its driving forces has been done by analyzing gross trade flows related to offshoring using gravity equations augmented by ad hoc measures of supply-side country differences. We develop a specification grounded in incomplete specialization that views bilateral gravity equations as statistical relationships constrained on countries’ multilateral specialization patterns. We apply this approach to an empirical analysis of the European trade in parts and components. Our results bring evidence that bilateral trade related to offshoring activities across Europe is driven by countries’ multilateral specialization incentives that are expressed by specific supply-side country differences relative to the rest of the world.

Suggested Citation

  • Richard Frensch & Jan Hanousek & Evžen Kočenda, 2012. "Incomplete specialization and offshoring across Europe," Working Papers 321, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
  • Handle: RePEc:ost:wpaper:321
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    Cited by:

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    2. Mathilde Maurel & Hugo Lapeyronie & Bogdan Meunier, 2016. "Impact of hard and soft infrastructure: Evidence from the EU partners, North Africa and CEECs," Working Papers hal-01396058, HAL.
    3. Sandrine Noblet & Antoine Belgodere, 2016. "Coordination Costs and the Geography of Production," Spatial Economic Analysis, Taylor & Francis Journals, vol. 11(4), pages 392-412, October.
    4. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.
    5. Jan Hanousek & Evžen Kočenda, 2015. "Determinanty evropského zahraničního obchodu: instituce, kultura, infrastruktura a geografie [Determinants of the European Trade: Institutions, Culture, Infrastructure and Geography]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(5), pages 624-640.
    6. Stephan Huber, 2018. "Trade Patterns and Endogenous Institutions: Global Evidence," Contributions to Economics, in: Product Characteristics in International Economics, chapter 0, pages 91-120, Springer.
    7. Hanousek, Jan & Kočenda, Evžen, 2014. "Factors of trade in Europe," Economic Systems, Elsevier, vol. 38(4), pages 518-535.

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    More about this item

    Keywords

    International trade; gravity model; offshoring; panel data; European Union;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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