The importance of global value chains and regional capabilities for the economic complexity of EU-regions
F. Colozza, R. Boschma, A. Morrison & Carlo Pietrobelli
#2021-051
This paper combines various literatures on Global Value Chains (GVC),
Economic Complexity and Evolutionary Economic Geography. The objective
is to assess the role of regional capabilities and GVC participation in
fostering economic complexity in 236 NUTS2-regions in Europe. Our
results suggest there is no such thing as a common path of economic
upgrading across EU regions. Regions with high economic complexity tend
to keep their advantageous positions, as they are capable of benefitting
from both regional capabilities (as proxied by a high relatedness
between local activities) and external linkages in terms of GVC
participation. Conversely, low-complex regions do not benefit from GVC
participation, unless their regional capabilities (in terms of
relatedness density) are also stronger.
JEL codes: B52, F23, O19, O33, R10
Keywords: Economic Complexity, Evolutionary Economic Geography, Global
Value Chains, Relatedness, Economic Upgrading, EU regions