Production Fragmentation and Transport Mode Choice in EU-28 Exports

Abstract

This study uses detailed data on exports from the European Union (EU-28) to non-EU countries to investigate the impact of global production fragmentation on the choice of transportation modes. The article finds a positive relationship between production fragmentation and air transportation. The study also finds that air transportation is more likely to be chosen for high-value products. Additionally, the positive effect of production fragmentation on the likelihood of using air transportation is more pronounced when goods are exported to medium-range markets, upper-middle-income countries, countries with better air transportation infrastructure, and time-sensitive products. © 2024 Taylor & Francis Group, LLC.