Sectoral Interlinkages in Lobal Value Chains: Spillovers and Network Effects

37 Pages Posted: 29 May 2019

See all articles by Erik Frohm

Erik Frohm

Sveriges Riksbank

Vanessa Gunnella

European Central Bank (ECB)

Date Written: May 2017

Abstract

This paper studies the role of global input-output linkages in transmitting economic disturbances in the international economy. Our empirical results suggest that these sectoral spillovers are both statistically significant and of economic importance. We also provide evidence that it is not the interlinkages per se that matter for the international transmission but rather the presence of global hub sectors that are either large suppliers or purchasers of other sectors' inputs. When the links between these sectors and the rest of the global value chain are severed, the spillovers diminish strongly and eventually become statistically insignificant. This highlights the importance of the structure of the network for enabling spillovers and the prominent role played by hub sectors in the global economy.

Keywords: input-output linkages, networks, spillovers, global value chains

JEL Classification: E30, E32, F44, F62

Suggested Citation

Frohm, Erik and Gunnella, Vanessa, Sectoral Interlinkages in Lobal Value Chains: Spillovers and Network Effects (May 2017). ECB Working Paper No. 2064 / May 2017. Available at SSRN: https://ssrn.com/abstract=3382284

Erik Frohm (Contact Author)

Sveriges Riksbank ( email )

Brunkebergstorg 11
SE-103 37 Stockholm
Sweden

HOME PAGE: http://https://sites.google.com/site/erikfrohm/

Vanessa Gunnella

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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