Spanish regions in global value chains: how important? how different?

Spanish regions in global value chains: how important? how different?

Series: Working Papers. 2026.

Author: Elvira Prades-Illanes and Patrocinio Tello-Casas.

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Abstract

The recent release of EUREGIO, a novel global input-output database with regional
detail for EU countries, allows to analyze the participation of EU regions in Global Value
Chains and their implications for the propagation of sector-specific shocks. We focus on
Spanish regions to exploit the granular information embedded in this database. We first
characterize foreign and domestic trade inter-linkages of Spanish regions and sectors.
Using an extended version of the Leontief scheme, we compute upstream output and
value added multipliers. Then, we calculate indicators developed in the Global Value
Chain literature to breakdown each region trade flows, both exports and outflows,
into value added components. Finally, by means of examples, we analyze the role of
networks (domestic or foreign) in the propagation of demand shocks (from customers
to suppliers), to evaluate the heterogeneous impact across regions and to illustrate
the potential of this approach. Our findings indicate that Spanish regions participate
differently in Global Value Chains and this fact may have important implications in the
propagation of shocks. According with our results, the strongest user-supplier linkages
are usually within the same sector, and, in general, with industries within the same
region or other Spanish regions. The Basque Country is the region with sectors with
the largest total output-multipliers and Catalonia with the lowest ones. Concerning
their participation in Global Value Chains, the Basque Country is the most integrated
region in the backward segment of the value chain, closely followed by Madrid, while
Catalonia –and a lesser extent Canary Islands– shows a comparatively low participation.
Concerning the forward participation, Catalonia shows the largest one on exports, while
Madrid and the Basque Country in outflows.

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