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Decomposition of Value-Added in Gross Exports:Unresolved Issues and Possible Solutions

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  • Miroudot, Sébastien
  • Ye, Ming

Abstract

To better understand trade in the context of global value chains, it is important to have a full and explicit decomposition of value-added in gross exports. While the decomposition proposed by Koopman, Wang and Wei (2014) is a first step in this direction, there are still three outstanding issues that need to be further addressed: (1) the nature of double counting in gross exports; (2) the calculation of the foreign value-added net of any double counting; and (3) the decomposition of gross exports at the industry level (the industry where exports take place). In this paper, we propose a new accounting framework that addresses these different issues and clarifies the definition of exports in inter-country input-output (ICIO) tables. It contributes to the literature: (i) by refining the definition of double-counted value-added in gross exports; (ii) by providing new expressions for the foreign value-added and double-counted terms; and (iii) by indicating how the new framework can be used to decompose exports at the industry level.

Suggested Citation

  • Miroudot, Sébastien & Ye, Ming, 2017. "Decomposition of Value-Added in Gross Exports:Unresolved Issues and Possible Solutions," MPRA Paper 83273, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:83273
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    References listed on IDEAS

    as
    1. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2014. "Tracing Value-Added and Double Counting in Gross Exports," American Economic Review, American Economic Association, vol. 104(2), pages 459-494, February.
    2. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    3. Arne J. Nagengast & Robert Stehrer, 2016. "Accounting for the Differences Between Gross and Value Added Trade Balances," The World Economy, Wiley Blackwell, vol. 39(9), pages 1276-1306, September.
    4. Borin, Alessandro & Mancini, Michele, 2017. "Follow the Value Added: Tracking Bilateral Relations in Global Value Chains," MPRA Paper 82692, University Library of Munich, Germany.
    5. Zhi Wang & Shang-Jin Wei & Kunfu Zhu, 2013. "Quantifying International Production Sharing at the Bilateral and Sector Levels," NBER Working Papers 19677, National Bureau of Economic Research, Inc.
    6. Johnson, Robert C. & Noguera, Guillermo, 2012. "Accounting for intermediates: Production sharing and trade in value added," Journal of International Economics, Elsevier, vol. 86(2), pages 224-236.
    7. Bart Los & Marcel P. Timmer & Gaaitzen J. de Vries, 2016. "Tracing Value-Added and Double Counting in Gross Exports: Comment," American Economic Review, American Economic Association, vol. 106(7), pages 1958-1966, July.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Miroudot, Sébastien & ye, ming, 2018. "Tracing value-added and double counting in sales of foreign affiliates and domestic-owned companies," MPRA Paper 85723, University Library of Munich, Germany.
    2. Miroudot, Miroudot & Ye, Ming, 2018. "A simple and accurate method to calculate domestic and foreign value-added in gross exports," MPRA Paper 89907, University Library of Munich, Germany.
    3. He, Yaxing & Huo, Weidong & Yu, Jie, 2023. "Tracing the regional dual value chains: Measurement on the production position and evidence from China," Journal of Asian Economics, Elsevier, vol. 85(C).
    4. Robert Stehrer, 2021. "Source – Assembly – Sink: Value Added Flows in the Global Economy," wiiw Working Papers 209, The Vienna Institute for International Economic Studies, wiiw.
    5. Miroudot, Sébastien & Ye, Ming, 2010. "Investigating double counting terms in the value-added decomposition of gross exports," MPRA Paper 93877, University Library of Munich, Germany.
    6. Sébastien Miroudot & Ming Ye, 2020. "Multinational production in value-added terms," Economic Systems Research, Taylor & Francis Journals, vol. 32(3), pages 395-412, July.

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    More about this item

    Keywords

    Trade accounting; input-output table; Value-added decomposition; Global value chains;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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