A Framework to Analyze the Position of European Firms in Global Value Chains

In this methodological paper, we introduce a conceptual and empirical framework that can inform on the position of European firms along Global Value Chains (GVCs). After taking stock of the most relevant scholarly works, we discuss how important it is to switch to a network perspective to account for the sophisticated coordination of webs of producers across national borders. Then, we show how a combination of firm- level data and I-O tables can be usefully employed to understand: i) the generation and distribution of economic value among interested stakeholders, ii) the organization of GVCs by multinational enterprises, iii) the propensity to retain economic value domestically, and iv) the co-location of production stages in geographical proximity. For our purpose, we introduce a case study on the global automotive industry, and we show some interesting stylized facts. Finally, we argue that firm-level evidence is crucial for the design of evidence-based policies within the Internal Market in the context of an ever-increasing global interdependence.