The Network Effect of Deglobalisation on European Regions

This paper investigates the effects of a retreat from global economic integration on the European regional production network for the period 2000-2010. We find that production has become increasingly fragmented, although the degree of heterogeneity across regions is substantial. This heterogeneity is also present in the direct and indirect effects of three different deglobalisation scenarios that we simulate. Our results show that deglobalisation generates winners and losers. Specifically, two groups of regions emerge; regions that would benefit from a return to a less integrated world, and regions that would instead gain from a strengthening of the European production network