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Who produces for whom in the world economy?

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For nearly two decades, the share of trade in inputs, also called vertical trade, has dramatically increased. This paper suggests a new measure of international trade: “value-added trade”. Like many existing estimates, “value-added trade” is net of double-counted vertical trade. It also reallocate trade flows to their original input-producing industries and countries and allows to answer the question “who produces for whom”. In 2004, 27% of international trade were "only" vertical specialization trade. The sector repartition of value-added trade is very different from the sector repartition of standard trade. Value-added trade is less regionalized than standard trade.

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Paper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2009-18.

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Date of creation: 2009
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Handle: RePEc:fce:doctra:0918

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Keywords: Globalization; Vertical trade; Regionalisation;

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