A New International Division of Labor in Europe: Offshoring and Outsourcing to Eastern Europe

Europe is reorganizing its international value chain. I document these changes in Europe’s international organization of production with new survey data of Austrian and German firms investing in Eastern Europe. I show estimates of the share of intra-firm trade between Austria and Germany on the one hand and Eastern Europe on the other. Furthermore, I present empirical evidence of the drivers of the new division of labor in Europe. I find among other things that falling trade costs and falling corruption levels as well as improvements in the contracting environment in Eastern Europe are affecting the level of intra-firm imports from Eastern Europe. They are also favoring outsourcing over offshoring. Low organizational costs of hierarchies and large costs of hold-up (when there are no alternative investors in Old Europe or no alternative suppliers in Eastern Europe) are favoring offshoring over outsourcing. Tax holidays granted by host countries in Eastern Europe also mildly affect the organizational choice

Factory Europe – changes in trade and GVC

Artykuł został przygotowany na konferencję ETSG 2019 Conference in Bern, Universiy of Bern 12-14.09.2019. Po wprowadzeniu niewielkich zmian zostanie przygotowany do publikacji.Three main regions can be distinguished: Factory Asia, Factory Europe, and Factory North America with three main hubs: Germany, China, and the USA. These headquarters economies link Factories. The paper presents changes that have occurred in the regional pattern of supply-chain trade in the global economy and in the Factory Europe from 2005 to 2015. I2E trade matrixes are prepared for the first and last year of the analyzed period. Changes in sourcing and sales patterns are discussed in the same years. The article uses data in gross terms and measured by value added. As a result, I analyze the developments that took place at the beginning of the 21st century in the global economy and Factory Europe. Global value chains combined with China are gaining importance in the global economy. In Factory Europe, in connection with the enlargement of the European Union, new member states are becoming an essential part of GVC combined with other mega-regional blocks by Germany

A New International Division of Labor in Europe: Offshoring and Outsourcing to Eastern Europe

Europe is reorganizing its international value chain. I document these changes in Europe’s international organization of production with new survey data of Austrian and German firms investing in Eastern Europe. I show estimates of the share of intra-firm trade between Austria and Germany on the one hand and Eastern Europe on the other. Furthermore, I present empirical evidence of the drivers of the new division of labor in Europe. I find among other things that falling trade costs and falling corruption levels as well as improvements in the contracting environment in Eastern Europe are affecting the level of intra-firm imports from Eastern Europe. They are also favoring outsourcing over offshoring. Low organizational costs of hierarchies and large costs of hold-up (when there are no alternative investors in Old Europe or no alternative suppliers in Eastern Europe) are favoring offshoring over outsourcing. Tax holidays granted by host countries in Eastern Europe also mildly affect the organizational choice.the empirics of global sourcing ; intra-firm trade ; contract enforcement ; comparative advantage in Eastern Europe ; empirical test of the theory of the firm

A New International Division of Labor in Europe: Outsourcing and Offshoring to Eastern Europe

Europe is reorganizing its international value chain. I document these changes in Europe’s international organization of production with new survey data of Austrian and German firms investing in Eastern Europe. I show estimates of the share of intrafirm trade between Austria or Germany on the one hand and Eastern Europe on the other. Furthermore, I present empirical evidence of the drivers of the new division of labor in Europe. I find among other things that falling trade costs and reduced levels of corruption as well as improvements in the contracting environment in Eastern Europe are affecting the level of intrafirm imports from that region. These factors also favor outsourcing over offshoring. In contrast, low organizational costs of hierarchies and large costs of holdup (when there are no alternative investors in Old Europe or no alternative suppliers in Eastern Europe) favor offshoring over outsourcing. Tax holidays granted by host countries in Eastern Europe also mildly affect the organizational choice.the empirics of global sourcing; intrafirm trade; contract enforcement; comparative advantage in Eastern Europe; empirical test of the theory of the firm

Competition and cooperation between Europe and China in the wind power sector

This paper uses a value chain lens to examine the prospects for competition and cooperation between Europe and China in the global wind power sector. Drawing on insights from fieldwork conducted in 2010 combined with secondary industry data, we find that Chinese and European industries are developing distinct models of industrialtechnological organisation. The usual headlines emphasising Sino-European competition or conflict fail to capture the complexity of current reality. While competition among lead firms is increasing, there are also considerable prospects for increased collaboration between firms across the value chains. China, Europe and the world can benefit from such collaboration to drive down the costs of the technology, improve quality, enhance innovation capabilities and make wind power a more credible energy option for the world. Policy initiatives in and between China and Europe have a big role to play in securing mutually beneficial relationships for the future. Keywords: wind power; global value chain; competition; cooperation; Europe; China

Price transmission and market power analysis in the Spanish seafood market chain

Spain is one of the largest seafood markets in Europe and the world. Seafood consumption has traditionally been very high in Spain; in 2005, for instance, around 36.7 kg per capita were consumed (MAPA, several years). However, little attention has been paid to the market and how the different levels of the market chain interact. This paper uses weekly data to analyse the price transmission elasticity of the main twelve seafood products in the Spanish market chain (Ex-vessel, Wholesale and Retail stages). We then investigate the price transmission asymmetry in these market stages. The results have significant implications for demand analysis, market power and margins in the seafood value chain.asymmetry, price transmission, seafood products, market power

Attitudes of Retailers and Consumers toward the EU Traceability and Labeling System for Beef

The spread of bovine spongiform encephalopathy (BSE) in Europe has induced EU policy makers to implement a mandatory traceability and labeling system in the beef supply chain. This paper analyzes consumer and retailer attitudes toward this system. Data used in the study were collected through two surveys of consumers and retailers in the province of Aragón, Spain, in 2002. Consumer and retailer attitudes toward beef traceability are examined to identify main underlying factors. Using these factors, consumers and retailers are segmented into homogenous groups according to their attitudes toward traceability for beef. Results indicate that both consumers and retailers highly value the positive aspects related to the traceability and labeling system for beef, and they value the possible disadvantages to a lesser extent.Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,

Enterprise Systems Adoption and Firm Performance in Europe: The Role of Innovation

Despite the ubiquitous proliferation and importance of Enterprise Systems (ES), little research exists on their post-implementation impact on firm performance, especially in Europe. This paper provides representative, large-sample evidence on the differential effects of different ES types on performance of European enterprises. It also highlights the mediating role of innovation in the process of value creation from ES investments. Empirical data on the adoption of Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), Knowledge Management System (KMS), and Document Management System (DMS) is used to investigate the effects on product and process innovation, revenue, productivity and market share growth, and profitability. The data covers 29 sectors in 29 countries over a 5-year period. The results show that all ES categories significantly increase the likelihood of product and process innovation. Most of ES categories affect revenue, productivity and market share growth positively. Particularly, more domainspecific and simpler system types lead to stronger positive effects. ERP systems decrease the profitability likelihood of the firm, whereas other ES categories do not show any significant effect. The findings also imply that innovation acts as a full or partial mediator in the process of value creation of ES implementations. The direct effect of enterprise software on firm performance disappears or significantly diminishes when the indirect effects through product and process innovation are explicitly accounted for. The paper highlights future areas of research.Enterprise Systems; ERP; SCM; CRM; KMS; DMS; IT Adoption; Post-implementation Phase; IT Business Value; Innovation; Firm Performance; Europe

Business model analysis of eHealth use cases in Europe and in Japan

Despite all the perceived potential, rolling out eHealth and wellness services has been a challenge for any telecommunications operator. In its part, an operator has to ensure secure transmission of health data, comply with the law when running the network and the platform, ensure interoperability between networks, interfaces and   products, etc. In addition, it needs to create a robust value chain and a sound business model with partners in possession of key resources and skills. Under the ongoing research collaboration on eHealth between NTT Japan R&D and France Telecom/Orange Labs, we study the business models of 15 health services in Europe and Japan. As one of the outcomes of the study, in this paper, we report the 11 key success factors that we have identified to be pivotal for positioning telecommunications operators on the value chain

Producing abroad while making profits at home:Veneto footwear and clothing industry

Over the last twenty years globalisation has brought about a sharp increase in the real and financial integration of the worldwide economy. In this closely knit context, the outsourcing of some of the productive and trade activities abroad has become one of the focal points of the policies followed by businesses in order to handle competition at worldwide level. In the 80s Italian clothing and footwear firms faced the increased competition in the international markets by outsourcing to domestic subcontractors and in the 90s transferred much of the previous outsourcing abroad, in countries with low labour costs, mainly in Eastern Europe, North Africa and East Asia. This paper is aimed to assess the impact of the offshoring strategy on firms. performance. It is based on a survey delivered to a group of 70 final producers, operating in the Veneto, that during the 90s began to manage production on a global scale. Direct investments, subcontracting and partnerships that materialize in product manufacturing abroad are considered as forms of international outsourcing. On this basis, by combining direct observations with balance sheets data, and data on employment stock at the firm’s level, the impact of the offshoring decision is evaluated. The study shows the importance of production management along the global value chain in giving new competitivity to the Veneto traditional sector.production organization, global value chains, fragmentation, internationalization, clothing industry, Italy