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Towards Analysis of Vertical Structure of Industries: a method and its application to U.S. industries

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  • Sadao, Nishimura

Abstract

In this paper we present a method to analyse vertical structure of industries. A product of an industry has a hierarchical value structure with layers, each of which consists of value added injected by various production stages (current and previous) of various industries. This vertical structure makes it possible to measure value added (VA) levels (vertical positions) of VA receivers (stages of use industries), while products of supply industries and their value added flow into these stages of industries which have respective VA levels. These flows are value added contributions by supply industries. By calculating each industry's VA contributions and corresponding target VA levels, it is possible to evaluate vertical structure of industries in the whole economy. We applied this method to 1998--2008 U.S. Input-Output Tables. Resulting average VA contribution levels and graphs of VA contributions are displayed.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 27464.

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Date of creation: 15 Dec 2010
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Handle: RePEc:pra:mprapa:27464

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Keywords: vertical structure; value added; supply; use;

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  1. Brian Wixted & Norihiko Yamano & Colin Webb, 2006. "Input-Output Analysis in an Increasingly Globalised World: Applications of OECD's Harmonised International Tables," OECD Science, Technology and Industry Working Papers 2006/7, OECD Publishing.
  2. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, Elsevier, vol. 54(1), pages 75-96, June.
  3. Norihiko Yamano & Nadim Ahmad, 2006. "The OECD Input-Output Database: 2006 Edition," OECD Science, Technology and Industry Working Papers 2006/8, OECD Publishing.
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