Capital Dynamics, Global Value Chains, Competitiveness and Barriers to FDI and Capital Accumulation in the EU


Amat Adarov and Robert Stehrer

wiiw Research Report No. 446, June 2020
63 pages including 13 Tables and 31 Figures

free download

The study analyses the relationships between capital dynamics, productivity, global value chains and foreign direct investment using panel data techniques. Among other results, we confirm the high importance of tangible and intangible ICT capital for productivity and GVC integration. We examine the extent of underinvestment in ICT in the EU relative to other major economies and identify bottlenecks for efficient capital allocation. The sluggish economic performance of the EU in the post-crisis period has been further challenged by the COVID-19 outbreak. Consolidating policy efforts to facilitate ICT investment, tackling the barriers to ICT adoption and broad-based digitalisation are critical for the EU in order to maintain a competitive edge and unlock new growth opportunities in the new normal.


Keywords: Productivity, digitalisation, ICT capital, FDI, global value chains, barriers to ICT investments, intangible capital

JEL classification: F14, F15, F21, E22, O47

Countries covered: non specific

Research Areas: Macroeconomic Analysis and Policy, International Trade, Competitiveness and FDI