0460323 20240103212338.420160624235959.9 84971577975 000384820200003 26 s. P cav_un_epca*02554460015-1920663 (2016)236-262Univerzita Karlova v Praze international trade production networks gravity model panel data European Union cav_un_auth*0283276 33 Frensch R. DE cav_un_auth*0014763 Hanousek J. CZ cav_un_auth*0312139 Ekonometrie Department of Econometrics E E Department of Econometrics 34 Kočenda Evžen UTIA-B CZ Ústav teorie informace a automatizace AV ČR, v. v. i. http://library.utia.cas.cz/separaty/2016/E/kocenda-0460323.pdf Based on the factor-proportion gravity framework, we build a model that identifies the driving forces for trade in parts and components. We test our model empirically by using a detailed and large European data set. We show that trade in parts and components is driven by relative supply-side country differences, proxied by wages and capital labor ratios. The pattern is compatible with models of incomplete specialization and trade. We take our results as evidence for the existence of international East-West production networks in Europe, driven by tradeoffs between wages, capital labor ratios and coordination costs. Our results also reveal that (i) in response to stronger relative wage differences, trade in parts and components across Europe is predominantly conducted along the extensive margin but (ii) the potential to intensify the trade and international production network in new EU members has not been exhausted yet. AH 2017 3 RVO:67985556 http://hdl.handle.net/11104/0260440 S 2 Article Business Finance BUSINESS.FINANCE 0.754 0 5.4 0.00024 0.133 160 0.275 Q3 0.375 24 Q4 4.556 23.4 Q4 Q3 23.438 2016 84971577975 SCOPUS 000384820200003 WOS cav_un_epca*0255446 Finance a úvěr-Czech Journal of Economics and Finance 0015-1920 0015-1920 Roč. 66 č. 3 2016 236 262 Univerzita Karlova v Praze