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Tracing Value-Added and Double Counting in Gross Exports: Comment

Author

Listed:
  • Bart Los
  • Marcel P. Timmer
  • Gaaitzen J. de Vries

Abstract

In a recent contribution to the AER, Koopman, Wang, and Wei (2014) proposed a decomposition of a country's gross exports into value-added components and double-counted terms. It is motivated by complex manipulation of basic accounting identities. In this comment we provide an alternative framework based on "hypothetical extraction." This parsimonious approach provides a clear definition of domestic value added in exports and has a natural extension into decompositions of bilateral export flows.

Suggested Citation

  • 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.
  • Handle: RePEc:aea:aecrev:v:106:y:2016:i:7:p:1958-66
    Note: DOI: 10.1257/aer.20140883
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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. 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.
    4. Robert C. Johnson, 2014. "Five Facts about Value-Added Exports and Implications for Macroeconomics and Trade Research," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 119-142, Spring.
    5. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Robert C. Johnson, 2018. "Measuring Global Value Chains," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 207-236, August.
    2. Ali-Yrkkö, Jyrki & Kuusi, Tero, 2019. "Brexit and Indirect Impact Routes through Global Value Chains," ETLA Reports 89, The Research Institute of the Finnish Economy.
    3. 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.
    4. 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.
    5. repec:bla:reviec:v:26:y:2018:i:5:p:1053-1083 is not listed on IDEAS
    6. repec:kap:openec:v:30:y:2019:i:3:d:10.1007_s11079-018-9518-8 is not listed on IDEAS
    7. James J. Fetzer & Tina Highfill & Kassu W. Hossiso & Thomas F. Howells III & Erich H. Strassner & Jeffrey A. Young, 2018. "Accounting for Firm Heterogeneity within U.S. Industries: Extended Supply-Use Tables and Trade in Value Added using Enterprise and Establishment Level Data," NBER Chapters,in: The Challenges of Globalization in the Measurement of National Accounts National Bureau of Economic Research, Inc.
    8. Eduardo Amaral Haddad & Fatima Ezzahra Mengoub & Vinicius A. Vale, 2018. "Water Content in Trade: A Regional Analysis for Morocco," Research papers & Policy papers 1808, Policy Center for the New South.
    9. Inaki Arto & Erik Dietzenbacher & Jose Manuel Rueda-Cantuche, 2019. "Measuring bilateral trade in terms of value added," JRC Working Papers JRC116694, Joint Research Centre (Seville site).
    10. Robert C. Feenstra, 2017. "Statistics to Measure Offshoring and its Impact," NBER Working Papers 23067, National Bureau of Economic Research, Inc.
    11. 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.
    12. Eduardo Amaral Haddad, 2017. "Linkages and Interdependence in Moroccan Regions," Policy notes & Policy briefs 1733, Policy Center for the New South.
    13. Robert C. Feenstra & Akira Sasahara, 2018. "The ‘China shock,’ exports and U.S. employment: A global input–output analysis," Review of International Economics, Wiley Blackwell, vol. 26(5), pages 1053-1083, November.
    14. Liou, Ruey-Wan & Lin, Hsing-Chun & Chang, Ching-Cheng & Hsu, Shih-Hsun, 2016. "Unveiling the true value of across-strait trade: The global value chain approach," China Economic Review, Elsevier, vol. 41(C), pages 159-180.
    15. ye, ming, 2016. "Trace the goods and value-added route in exports," MPRA Paper 73476, University Library of Munich, Germany.
    16. Sasahara, Akira, 2018. "Explaining the Employment Effect of Exports: Value-Added Content Matters," MPRA Paper 89731, University Library of Munich, Germany.
    17. repec:oup:jecgeo:v:19:y:2019:i:1:p:1-30. is not listed on IDEAS

    More about this item

    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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