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VALUE CHAINS AND DOMESTIC COMPETITIVENESS

Published online by Cambridge University Press:  28 April 2020

Michael Gasiorek ,
Alasdair Smith  and
Nicolo Tamberi
Michael Gasiorek
Affiliation:
University of Sussex, UKTPO. E-mails: m.gasiorek@sussex.ac.uk; Alasdair.Smith@sussex.ac.uk; N.Tamberi@sussex.ac.uk.
Alasdair Smith
Affiliation:
University of Sussex, UKTPO. E-mails: m.gasiorek@sussex.ac.uk; Alasdair.Smith@sussex.ac.uk; N.Tamberi@sussex.ac.uk.
Nicolo Tamberi
Affiliation:
University of Sussex, UKTPO. E-mails: m.gasiorek@sussex.ac.uk; Alasdair.Smith@sussex.ac.uk; N.Tamberi@sussex.ac.uk.
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Abstract

With international trade increasingly undertaken within vertically fragmented supply chains, this paper considers the impact of changes in trade costs on domestic output. In the context of the UK’s exit from the EU we show that the negative impact on UK output will depend on changes in both domestic and export competitiveness. Since for many firms the majority of their sales are to the domestic market, the domestic competitiveness impact may be quantitatively more important. The impact on output will be more significant the greater the integration of firms in international supply chains, and the greater the asymmetric impact of leaving the EU on UK firms relative to EU firms.

Keywords

Economic impacts of globalisationEmpirical studies of tradeEconomic integrationTrade forecasting and simulationInternational policy coordination and transmission.F6F14F15F17F42.
Type
Research Article
Information
National Institute Economic Review , Volume 252 , May 2020 , pp. R45 - R51
Copyright
© National Institute of Economic and Social Research, 2020

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Footnotes

The authors are grateful for helpful comments and discussions from UKTPO Fellows and notably from L. Alan Winters, and Julia Magntorn-Garrett. Any errors and omissions remain the fault of the authors. All three authors are based at the University of Sussex and affiliated with the UK Trade Policy Observatory (UKTPO), and the Department of Economics.

References

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