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Who produces for whom in the world economy?

Author

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  • Guillaume Daudin
  • Christine Rifflart
  • Danielle Schweisguth

Abstract

For two decades, the share of trade in inputs, also called vertical trade, has been dramatically increasing. In reallocating trade flows to their original input-producing industries and countries, this paper suggests a new measure of international trade: `value-added trade' and makes it possible to answer the question `who produces for whom?' In 2004, 27% of international trade was vertical trade. The industrial and geographic patterns of value-added trade are very different from those of standard trade. Value-added trade is relatively less important in regional trade but the difference is not more important for Asia than for America.

Suggested Citation

  • Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2011. "Who produces for whom in the world economy?," Canadian Journal of Economics, Canadian Economics Association, vol. 44(4), pages 1403-1437, November.
    • Handle: RePEc:cje:issued:v:44:y:2011:i:4:p:1403-1437
    DOI: 10.1111/j.1540-5982.2011.01679.x
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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F19 - International Economics - - Trade - - - Other

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