The Role of Trade-in-Tasks For the Competitiveness of the European Pig Industry
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The global trend of agro-industrialisation is increasingly transforming farms and firms into specialist component suppliers within a multi-stage food processing chain. The trade-in-tasks theory predicts in this context that declining costs for cross-country outsourcing of certain stages of the production process (tasks) generates intra-industry trade and may increase the competitiveness of the final product. Based on this theory, a conceptual framework was established and empirically applied to the EU27 pig industry. The results suggest that the average EU country could increase the competitiveness of its processed meat exports; one potential source of these gains can be structural change among pig farms in other EU countries, which is utilized through vertical intra-industry trade in live pigs. In contrast, changes in outsourcing costs since 2002 due to changes in EU membership or due to the adoption of the Euro appeared non-significant in panel regressions.