ABSTRACT
In the last decade a new division of labor has emerged in the world economy. The international division of labor is characterized by firms geographically separating different production stages across the world economy to exploit differences in production costs. Thus, firms organize their activity in a global value chain. With Eastern enlargement Europe is reorganizing its international value chain. European firms outsource and offshore production to East-Central and Eastern Europe. As a result, Eastern Europe is becoming an important location for European firms’ international organization of production.
