EUROPA - Introduction to the Mechanical and Electrical Engineering ...

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Figure 3.1:
The evolution of intrasectoral trade between the new and the
old Member States
90%
80%
70%
Grubel-Lloyd Index
60%
50%
40%
30%
Mechanical Engineering
Electrical Engineering
20%
10%
0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: EUROSTAT; national statistical bureaus; VDMA; ZVEI; Calculation by Ifo the Institute.
This analysis reveals that in mechanical engineering a new cluster is emerging. The
countries Germany, Italy, Austria, Denmark, Sweden and to a certain extent the Netherlands,
which have a strong position in this sector, are above all involved in the exploitation
of the comparative advantages provided by production locations in the new Member
States. Therefore the relocation of production – a term with a negative connotation –
leads to a wider European mechanical engineering cluster which will support this industry’s
competitiveness. The exploitation of differentials in wage and quality leads to
products with better price-efficiency ratios, which contributes to gain higher shares in
global markets.
The emergence of a new, wider cluster in mechanical engineering is underscored by
structural changes in trade with third countries, which indicates a specialization between
the EU-15 and the new Member States. The EU-25 exports to the rest of the World have