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

International comparators and poverty and health in Europe

Summary points: In 1970 male life expectancy at age 15 was 56 in countries that now form the European Union; 55 in the communist countries of central and eastern Europe (excluding the Soviet Union); and 52 in the Soviet Union. In 1997 male life expectancy was 60 in the countries that now form the European Union; 54 in the former communist countries of central and eastern Europe (excluding the former Soviet Union); and 48 in Russia. The relative disadvantage for women was similar, but the absolute differences were smaller. Mortality changes after 1989 in eastern Europe were correlated with changes in gross domestic product and changes in income inequalities. In the 1980s there were inequalities in health within individual countries in eastern Europe; these were wider after 1989. Inequalities in health within individual countries in eastern Europe were more strongly related to education than to measures of economic wellbeing

Whither growth in central and eastern Europe? Policy lessons for an integrated Europe

In this Blueprint, Bruegel Resident Fellows Zsolt Darvas, Jean Pisani-Ferry, André Sapir and their co-authors Torbjörn Becker, Daniel Daianu, Vladimir Gligorov, Michael A Landesmann, Pavle Petrovic, Dariusz K. Rosati and Beatrice Weder di Mauro argue that in view of the depth of integration in Europe, the development model of the central, eastern and south-eastern Europe (CESEE) region, despite its shortcomings, should be preserved. But it should be reformed, with major implications for policymaking both at national and EU levels. If so, what are the required changes? Bruegel and The Vienna Institute for International Economic Studies (wiiw) cooperated to form this expert group of economists from various European countries to research these issues.

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

The impact of the crisis on budget policy in Central and Eastern Europe

After drawing some lessons for fiscal policy from previous emerging market crises, Zsolt Darvas concludes with some thoughts on the appropriate policy response from a more normative perspective. The key message of the paper is that the crisis should be used as an opportunity to introduce reforms to avoid future pro-cyclical fiscal policies, to increase the quality of budgeting and to increase credibility. These reforms should include fiscal responsibility laws comprising medium-term fiscal frameworks, fiscal rules, and independent fiscal councils. When fiscal consolidation is accompanied by fiscal reforms that increase credibility, non- Keynesian effects may offset to some extent the contraction caused by the consolidation.

The EU's Role in Supporting Crisis-Hit Countries in Central and Eastern Europe

The crisis has hit central and eastern European countries harder than other regions of the world. In this policy contribution Resident Scholar Zsolt Darvas looks at the role of the EU and its institutions in supporting crisis-hit CEE countries; the stabilising effects of the EUÂ?s coordinated multilateral financial assistance; and the commitment shown by Western European banks to the region. However Darvas argues that there were certain actions, or failures to act, on the part of EU institutions and governments, that have amplified the effects on CEE countries of the crisis. The European Central Bank has given little direct support to non-euro-area countries, and the EU has done little for EU neighbourhood countries. Meanwhile, euro-area membership has shielded from the crisis some countries with worse fundamentals than certain CEE countries.

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

Curating the invisible: contemporary art practices and the production of meaning in Eastern Europe.

Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000394/Article 6 of 6 in an issue devoted to the visual culture of South Eastern EuropeThis article addresses the system of art and the issue of contemporary art curatorship in the area known as ‘Eastern Europe’, with a particular emphasis on the status of curatorial practices in the postsocialist condition. The problems explored are focused firstly around the issues of the representation of Eastern Europe and contemporary Eastern European art, in terms of organizing exhibitions in the context of globalisation, and secondly the role of a contemporary art curator as compared to the role performed by a contemporary cultural manager. The question to be raised is related to ‘The Image of Eastern Europe’ within the functioning of global cultural imperialism, i.e. how do the models of contemporary artistic and especially curatorial practices respond to the up-to-date demands of cultural policy issues related to the area of the former communist/socialist countries in Eastern Europe?Postprin