We show that traditional gravity variables play a significant role in explaining trade flows related to global value chain participation. We find evidence that cooperation costs - measured by linguistic and geographical proximity - are more relevant for trade that reflects cross-border...

This paper intends to combine two fields in the economic literature by examining empirically the FDI pattern - horizontal versus vertica l- within the European Union and the relevance of trade integration as a potential determinant of investment flows over the period 1995-2009. We capture trade...