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August 22, 2026The Annals of Regional ScienceOpen Access

Global value chains and top income inequality: evidence from European regions

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Authors

MPMartina PardyEHEduardo Hernández-Rodríguez

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Overview

Econometric analysis reveals forward global value chain participation increases top income inequality across European regions, highlighting the role of regional development and institutions.

Key Points

  • Investigate how different forms of regional participation in global value chains influence top income inequality across European regions.
  • Analyzed regional input–output data linked with income distribution data across European regions at the NUTS-2 level from 2003 to 2010.
  • Constructed indicators measuring forward and backward participation in global value chains.
  • Estimated the relationships using panel fixed effects and instrumental variable regression models.
  • Forward participation in global value chains is significantly associated with higher top income inequality, whereas backward participation shows no significant association.
  • The positive relationship with top income inequality is primarily driven by manufacturing, transport and communication, and business activities.
  • Inequality effects are significantly stronger in economically less developed regions and regions with lower institutional quality.

Cite This Study

Pardy et al. (2026) studied this question.

synapsesocial.com/papers/6a895fc4ca7ade938187e8ffhttps://doi.org/10.1007/s00168-026-01534-2
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