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Vertical specialization and industrial upgrading: a preliminary note

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  • Xiao Jiang
  • William Milberg
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    Abstract

    Abstract Vertical specialization is a measure of the import content of exports. Given the widely recognized importance of trade in tasks and global production networks, vertical specialization has recently gained the attention of international trade researchers and policy makers. In this note, we use measured changes in the within-country pattern of vertical specialization to gauge the relevance of task trade for industrial upgrading and economic development. We first calculate vertical specialization (VS) for five countries between 1995 and 2005 – USA, China, India, Brazil and South Africa. We then construct our own measure – the import content of export expansion ratio (ICEER) – to isolate changes in import content from the growth in exports. Since the ICEER measure captures structural change in the import content of exports for each country at the sectoral level, we use ICEER as a proxy for the kind of industrial upgrading associated with raising the proportion of export value accruing to the domestic sector. We name this kind of upgrading ‘vertical upgrading’.

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    Bibliographic Info

    Paper provided by BWPI, The University of Manchester in its series Brooks World Poverty Institute Working Paper Series with number ctg-2012-10.

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    Date of creation: 2012
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    Handle: RePEc:bwp:bwppap:ctg-2012-10

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    1. William Milberg & Deborah Winkler, 2012. "Economic and Social Upgrading in Global Production Networks: Problems of Theory and Measurement," Brooks World Poverty Institute Working Paper Series ctg-2010-04, BWPI, The University of Manchester.
    2. Escaith, Hubert & Lindenberg, Nannette & Miroudot, Sébastien, 2010. "International Supply Chains and Trade Elasticity in Times of Global Crisis," MPRA Paper 20478, University Library of Munich, Germany.
    3. Humphrey, John & Chen, Martha, 2004. "Upgrading in global value chains," ILO Working Papers 369852, International Labour Organization.
    4. Yuqing Xing & Neal Detert, 2010. "How iPhone Widens the US Trade Deficits with the PRC?," GRIPS Discussion Papers 10-21, National Graduate Institute for Policy Studies.
    5. Sébastien Miroudot & Alexandros Ragoussis, 2009. "Vertical Trade, Trade Costs and FDI," OECD Trade Policy Papers 89, OECD Publishing.
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