Abstract
In this chapter we focus on production chains, i.e., on intermediate commodities, in manufacturing. Based on input–output data for the 2 years 2000 and 2005, we investigate the input change of the intermediate import shares. The result is that the share of intermediate imports has increased in some important sectors. The value-added chain has been heavily changed in later years. This is visible as an increase in offshoring and fragmentation in some important production sectors of the economy. The conclusion is that the globalisation process has affected tasks within the production chain in the Swedish economy. Finally, adjustment and necessary policy reforms are discussed.
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- 1.
See Norén (2010). This is from an article published in Journal of Policy Modeling © 2010 Elsevier. The journal title: Intermediate structure changed by globalisation – A study of Swedish manufacturing 2000–2005. Volume 32, Issue 2, pp. 223–230. License Agreement Number: 2893110936588.
- 2.
Sweden is an export-oriented market economy featuring a skilled labour force. Sweden is since 1995 member of the European union, but the Swedes have rejected euro in a referendum 2003, and thus, maintains its own currency, the Swedish krona.
- 3.
For details, see Barysch et al. (2005). See also the other interesting articles in this special issue about China as the new global player.
- 4.
Per capita GDP, however, GDP is relatively low to China’s large population.
- 5.
See the discussion in Buti and Sapir (1998) Chaps. 12 and 13.
- 6.
As a proportion of GDP, world trade reached a peak just before the First World War. It is only in the last decades that it has returned to these levels. See Begg et al. (2008).
- 7.
China has followed its WTO commitments but used implementation legislation and so-called non-tariff barriers to keep its markets closed in practice. Thus, United States and the EU, insisted that it remained classified as a non-market economy for a period of 15 years. Such a classification makes it easier for other countries to impose anti-dumping duties on China. See Barysch et al. (2005), p. 13.
- 8.
From 1995 to 2000 the share of imported intermediate commodities in total inter-mediate commodities has increased, according to EUROSTAT data discussed by Sinn (2006). Following Sinn, the share has increased in Europe, measured in percentage points. Italy by 2, Denmark by 4, Finland by 4, Netherlands by 1, Austria by 4, Sweden by 5, and Germany by 6.
- 9.
Tables for 2000 have been revised compared to previous publication, due to a general revision of the time series. Tables for 2005 are published for the first time.
- 10.
Using input–output tables from 10 OECD and four emerging market countries Hummel et al. (2001) calculate the use of imported inputs in producing goods that are exported.
- 11.
We will calculate the intermediate relation in respective year, and then only compare the intermediate relation between the 2 years 2000 and 2005.
- 12.
- 13.
The homogeneity assumption requires that all commodities of a single sector should be produced in strictly fixed proportions, that each sector should have a single input structure, and that there should be no substitution between the commodities of different sectors.
- 14.
The level of detail in the tables is 53 industries and 53 products, classified according to NACE Rev. 1.1 and CPA2002. Due to confidentiality issues SCB is not able to present products 13 and 14 separately. These products are presented within product aggregate 13. Nor SCB is able to present products 15 and 16, 31 and 32 separately. These products are presented within product aggregates 15 and 31.
- 15.
Note, the mining and quarrying industry (10–14), and coke, petroleum products and nuclear fuels (23) are included in the manufacturing sector.
- 16.
To study the input of research and development services (73) the reader must view the input–output tables referred to in the reference list.
- 17.
Despite a sharp decrease of the price index for intermediate imports in sector 30, the input–output statistics show no relative increase in the volume for intermediate imports, quite the contrary. However, since the input–output statistics are in current prices the volume reported in the input–output table are influenced by the price index. It also indicates that the short-term substitution elasticity between intermediate imports and intermediate domestic production is very low.
- 18.
Begg et al. (2008).
- 19.
In an interesting article by Greenaway et al. (2008) transformation of industrial resources takes one of three forms. Exit by closedown, exit by merger or acquisition, and switching to another industry. Using a dataset of Swedish firms that extends over two decades, the authors find as the level of international competition increased, that firms exited by merger or closed compared to no change at all. They did not found a similar correlation regarding the probability of switching, which tended to be higher in industries characterised by comparative disadvantage.
References
Baldwin R (2006) Europe’s reaction to the challenge of globalisation. CESifo Forum 7(3):29–35
Barysch K, Grant C, Leonard M (2005) Embracing the dragon: can the EU and China be friends? CESifo Forum 6(3):8–15
Begg I, Draxler J, Mortensen J (2008) Is social Europe fit for globalisation? A study on the social impact of globalisation in the European Union. Centre for European policy Studies. Published by The European Commission, Directorate-General for Employment, Social Affairs and Equal Opportunities. Unit E1: social and demographic analysis
Buti M, Sapir A (1998) Economic policy in EMU, The European Commission Services. Oxford University Press, Oxford
Greenaway D, Gullstrand J, Kellner R (2008) Surviving globalisation. J Int Econ 74:264–277
Hummels D, Ishii J, Yi K-M (2001) The nature and growth of vertical specialization in world trade. J Int Econ 54:75–96
Norén R (2010) Intermediate structure changed by globalisation: a study of Swedish manufacturing 2000–2005. J Policy Model 2:223–230
Ohlsson L, Vinell L (1987) Tillväxtens drivkrafter: En studie av industriers framtidsvillkor. Industriförbundets Förlag, Stockholm
Sinn H-W (2006) Welcome and introduction lecture to the 5th Munich Economic Summit 2006. Europe and the new division of labour. CESifo Forum 7(3)
SOU 2000:7. Långtidsutredningen (Medium term survey) 99, Bilaga 3. Appendix A och B, Finansdepartementet (Ministry of Finance), Allmänna förlaget, Stockholm
SOU 2003:45. Långtidsutredningen (Medium term survey) 2003, Bilaga 6. Appendix B. Finansdepartementet (Ministry of Finance), Allmänna förlaget, Stockholm
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Statistical Sources
Statistics Sweden (SCB), The Swedish National Accounts, input–output tables for Sweden according to the European System of National Accounts (ESA95). Input–output tables 2000 and 2005. Publication NR 10 SM 0701
By internet the tables can be found (Autumn 2008) at SCB web page: www.scb.se. See National Accounts: http://www.scb.se/Pages/ProductTables____11040.aspx
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Appendices
Appendix 1: 2000 and 2005 SNA Statistics
Million SEK in current prices
Appendix 2: Sector Classification
8.2.1 Capital-Intensive Industry
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10–14: Mining and quarrying.
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21: Pulp, paper and paper products.
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22: Printed matter and recorded media.
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24–26: Chemicals, rubber and plastic products, other non-metallic mineral products.
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27: Basic metal products.
8.2.2 Labour-Intensive Industry
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15–16: Manufacture of food, beverages and tobacco.
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17–19: Textiles. Wearing apparel and furs. Leather and leather products.
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20: Wood and wood products, except furniture.
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28: Fabricated metal products, except machinery and equipment.
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36–37: Furniture, other manufacturing and recovered secondary raw materials.
8.2.3 Knowledge-Intensive Industry
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29: Machinery and equipment.
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30: Office machinery and apparatus.
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31–32: Electrical machinery and apparatus. Radio, television and communication equipment included.
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33: Medical, precision and optical instruments, watches and clocks.
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34–35: Motor vehicles, trailers and semi trailers, other transport equipment.
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Norén, R. (2013). Globalisation and Intermediate Activity. In: Equilibrium Models in an Applied Framework. Lecture Notes in Economics and Mathematical Systems, vol 667. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-34994-2_8
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DOI: https://doi.org/10.1007/978-3-642-34994-2_8
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