--- title: "Growth in Chains: EU Value Chain Productivity and its Slowdown" authors: - name: "Kuusi, Tero" url: "https://www.etla.fi/henkilot/kuusi-tero/" sameAs: - "https://twitter.com/TeroKuusi" - name: "Lähdemäki, Sakari" url: "https://www.etla.fi/henkilot/lahdemaki-sakari/" sameAs: - "https://orcid.org/0000-0003-3349-1451" - "https://twitter.com/lahdems" date_published: "2026-09-04" series: "ETLA Working Papers" series_number: "146" issn: - "2323-2420" - "2323-2439" jel_codes: - "F60" - "O47" - "L16" - "O14" - "E22" language: "en" publisher: "ETLA Economic Research" pdf_url: "https://www.etla.fi/wp-content/uploads/ETLA-Working-Papers-146.pdf" keywords: - "Global value chains" - "Intangibles" - "Productivity" - "Globalization" identifier: "https://www.etla.fi/julkaisut/id/ETLA-Working-Papers-146" abstract: "We study Europe’s post-2008 productivity slowdown using novel total factor productivity (TFP) measures that follow production beyond individual industries in global value chains (GVCs). We collect a newset of stylized facts: (1) the slowdown is broad-based, with productivity growth weakening both in final-producer industries and in upstream industries; (2) the staggered entry into force of bilateral investment treaties with China is followed by higher value-chain TFP and greater business-intangible investment; while (3) the gains associated with technology intangibles are weak. We use these facts to discipline a stylized two-region general-equilibrium model with business capabilities, technology-related knowledge, and cross-border knowledge spillovers. The calibration supports a two-stage interpretation of Europe’s experience: (1) sizeable initial integration gains because accumulated business capabilities convert market access into productivity, and (2) later losses when technology improvements are converted into productivity more effectively elsewhere." --- # Growth in Chains: EU Value Chain Productivity and its Slowdown **Published:** 2026-09-04 **Categories:** Working Papers **URL:** https://www.etla.fi/en/publications/working-papers-en/growth-in-chains-eu-value-chain-productivity-and-its-slowdown-2/ #### Abstract We study Europe’s post-2008 productivity slowdown using novel total factor productivity (TFP) measures that follow production beyond individual industries in global value chains (GVCs). We collect a newset of stylized facts: (1) the slowdown is broad-based, with productivity growth weakening both in final-producer industries and in upstream industries; (2) the staggered entry into force of bilateral investment treaties with China is followed by higher value-chain TFP and greater business-intangible investment; while (3) the gains associated with technology intangibles are weak. We use these facts to discipline a stylized two-region general-equilibrium model with business capabilities, technology-related knowledge, and cross-border knowledge spillovers. The calibration supports a two-stage interpretation of Europe’s experience: (1) sizeable initial integration gains because accumulated business capabilities convert market access into productivity, and (2) later losses when technology improvements are converted into productivity more effectively elsewhere. --- ## Additional Information **Kirjoittajat:** Kuusi, Tero - Lähdemäki, Sakari **Kansikuva:** https://www.etla.fi/wp-content/uploads/etla-working-papers-146-kansi.jpg **Lataa Pdf:** https://www.etla.fi/wp-content/uploads/ETLA-Working-Papers-146.pdf **Key Words:** Global value chains, Intangibles, Productivity, Globalization **Jel:** F60, O47, L16, O14, E22 **Paivays:** 04.09.2026 **Sivuja:** 76 **Kieli:** en **Sarja:** ETLA Working Papers **Sarja Nro:** 146 **Issn:** 2323-2420, 2323-2439 (Pdf) **Saatavuus:** 2 ## Bibliographic metadata (JSON-LD) ```json { "@context": "https://schema.org", "@type": "ScholarlyArticle", "@id": "https://www.etla.fi/julkaisut/id/ETLA-Working-Papers-146", "headline": "Growth in Chains: EU Value Chain Productivity and its Slowdown", "inLanguage": "en", "publisher": { "@type": "Organization", "name": "ETLA Economic Research", "url": "https://www.etla.fi", "logo": { "@type": "ImageObject", "url": "https://www.etla.fi/wp-content/uploads/logo-etla_logo.svg" } }, "datePublished": "2026-09-04T00:00:00+00:00", "author": [ { "@type": "Person", "name": "Kuusi, Tero", "url": "https://www.etla.fi/henkilot/kuusi-tero/", "sameAs": [ "https://twitter.com/TeroKuusi" ] }, { "@type": "Person", "name": "Lähdemäki, Sakari", "url": "https://www.etla.fi/henkilot/lahdemaki-sakari/", "sameAs": [ "https://orcid.org/0000-0003-3349-1451", "https://twitter.com/lahdems" ] } ], "abstract": "We study Europe’s post-2008 productivity slowdown using novel total factor productivity (TFP) measures that follow production beyond individual industries in global value chains (GVCs). 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