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Measuring Bilateral Exports of Value Added: A Unified Framework

In: Challenges of Globalization in the Measurement of National Accounts

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  • Bart Los
  • Marcel P. Timmer

Abstract

We provide a unified framework for measuring bilateral exports of value added. We outline a general methodology that encompasses the measures introduced by Johnson and Noguera (2012) (value added consumed abroad) and Los et al. (2016) (value added in exports), to which we refer as VAX-C and VAX-D, respectively. In addition we suggest a novel third measure, VAX-P, which indicates the value added used abroad in the final stage of production. We show that they can all be derived with the method of hypothetical extraction in a general input-output model. This is helpful in comparing and contrasting their characteristics. As a corollary, we show that for VAX-C and VAX-P the sum of bilateral measures is equal to the corresponding aggregate measure, but that this is generally not true for VAX-D. We illustrate all measures with empirical examples computed on the basis of the World Input-Output Database. These indicators can found at www.wiod.org.
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Suggested Citation

  • Bart Los & Marcel P. Timmer, 2020. "Measuring Bilateral Exports of Value Added: A Unified Framework," NBER Chapters, in: Challenges of Globalization in the Measurement of National Accounts, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:14134
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    2. Elvira Prades-Illanes & Patrocinio Tello-Casas, 2020. "Spanish regions in Global Value Chains: How important? How different?," Working Papers 2026, Banco de España.
    3. Sunghun Lim, 2021. "Global Agricultural Value Chains and Structural Transformation," NBER Chapters, in: Risks in Agricultural Supply Chains, National Bureau of Economic Research, Inc.
    4. Escaith, Hubert, 2021. "Withering globalization? The Global Value Chain effects of trade decoupling," MPRA Paper 107935, University Library of Munich, Germany.
    5. 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.
    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.
    7. Marcel P. Timmer & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2021. "Supply Chain Fragmentation and the Global Trade Elasticity: A New Accounting Framework," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 69(4), pages 656-680, December.
    8. Álvaro Lalanne, 2021. "Measuring value circulation in regional chains: assessing two alternative methods in South America," Documentos de Trabajo (working papers) 0621, Department of Economics - dECON.
    9. Bruno Casella & Richard Bolwijn & Daniel Moran & Keiichiro Kanemoto, . "Improving the analysis of global value chains: the UNCTAD-Eora Database," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    10. Escaith, Hubert, 2019. "Extraction-cum-substitution: A KISS approach to mapping the impacts of bilateral trade conflicts," MPRA Paper 95162, University Library of Munich, Germany.

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