Functional division of labour in EU value chains

Client/Funding Institution

Hans Böckler Stiftung


The emergence of global value chains has radically changed the organisation of production in the EU economy. In particular, the increasingly fine-grained international division of labour has made it possible for countries to specialise in individual business functions of the value chain and thereby generate higher value added. This project examined the causes and effects of these "functional specialisation patterns" on the labour market, particularly on wage developments and working conditions. The project combined two existing methods for the analysis of functional specialisations in order to ensure the reliability of results. The determinants and implications of functional specialisation on the labour markets in European countries and regions have been analysed using, inter alia, cluster analyses, panel regression methods and binary choice models. Ultimately, the questions to be answered by this study were: Why do some countries become locations for corporate headquarters and research laboratories, while others end up as "extended workbenches" within the European division of labour? What are the effects of these "functional specialisations" for labour markets in Europe?


January 2022 - December 2022

wiiw team Leader

Roman Stöllinger

wiiw Staff

Beata Borosak, Veronika Janyrova, Sandra M. Leitner, Beate Muck, Galina Vasaros, Zuzana Zavarská, David Zenz


External Publications

Video of study presentation, 23 November 2022
Determinants of Functional Specialisation in EU Countries, HBS Working Paper No. 287, May 2023
Functional Specialisation and Working Conditions in Europe, HBS Working Paper No. 284, May 2023

Countries covered: EU Member States

Research Areas: International Trade, Competitiveness and FDI