This paper proposes a conceptual and measurement framework to analyze the distribution of intangible assets within and across global value chains (GVCs) and provide novel empirical evidence for the European Union (EU). It sheds light on the changing position of four main EU regional areas (Eastern, Southern, Western and Northern countries) in GVCs looking at the changes in the shares of the intangibles assets that their industries (high and low tech manufacturing, and high and low knowledge intensive sectors) account for. It then conducts a structural decomposition analysis to disentangle the trade-related and technology-related drivers responsible for these changes. The findings reveal that while economic integration within Europe has deepened over the last decades, it has only partially mitigated pre-existing asymmetries in the distribution of intangible assets, with distinct patterns between manufacturing and service industries. Eastern Europe in particular has improved its GVC position in intangible terms although through its growing role as a GVC supplier of manufacturing inputs rather than through an increase in the intangible intensity of its industries. In contrast, Western Europe has consolidated its role as a knowledge supplier in GVCs, increasing the share of knowledge inputs provided by its knowledge intensive sectors.

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