Production linkages, value added trade and employment in the wider Europe

Client/Funding Institution

Anniversary Fund of the Oesterreichische Nationalbank


The establishment of supply and production links has been a major driving force of the integration of the new EU Member States. Countries strongly integrated in production networks benefited in terms of productivity, value added and export growth. An important question on the further widening of Europe therefore is the integration of today’s accession countries and possibly the EU neighbourhood countries in that respect. For a detailed study of actual patterns of production integration, a European multi-country input-output table is constructed allowing for an analysis of patterns of integration and value added trade in the wider European context. The potential impacts are further investigated by using a gravity modelling approach accounting for the importance of trade in intermediates and value added trade. Finally, various scenarios will be calculated providing evidence of potential impacts of further integration or disintegration on income and employment.


January 2015 - December 2016

wiiw team Leader

Robert Stehrer

wiiw Staff

Alexandra Bykova, Oliver Reiter, Monika Schwarzhappel

Keywords: production, trade, employment, input-output, integration, growth

Countries covered: New EU Member States

Research Areas: Labour, Migration and Income Distribution, International Trade, Competitiveness and FDI