The importance of global value chains and regional capabilities for the economic complexity of EU-regions

F. Colozza, R. Boschma, A. Morrison & Carlo Pietrobelli


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

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