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Follow the value added: bilateral gross export accounting

Author

Listed:
  • Alessandro Borin

    (Bank of Italy)

  • Michele Mancini

    (Bank of Italy)

Abstract

The diffusion of international production networks has challenged the capability of traditional trade statistics to provide an adequate representation of supply and demand linkages among the economies. To address this issue, new statistical tools (the Inter-Country Input-Output tables) and new analytical frameworks have been developed. Koopman, Wang and Wei propose an accounting methodology to decompose a country’s total gross exports by source and final destination of their embedded value added. We develop this approach further by deriving a fully consistent counterpart for bilateral trade flows, refining the original framework. Along with other contributions, our methodology completes the bridge between traditional trade statistics and the systems of national accounts and provides new tools for investigating global value chains. Here we present two empirical applications of two different versions of our decomposition of bilateral trade flows: one explores the forward linkages of Italian exports; the second derives a measure of the share of value-chain-related trade and assesses how its evolution since the mid-1990s has affected the relationship between world trade and income.

Suggested Citation

  • Alessandro Borin & Michele Mancini, 2015. "Follow the value added: bilateral gross export accounting," Temi di discussione (Economic working papers) 1026, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_1026_15
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    References listed on IDEAS

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    Cited by:

    1. Gaulier, Guillaume & Sztulman, Aude & Ünal, Deniz, 2020. "Are global value chains receding? The jury is still out. Key findings from the analysis of deflated world trade in parts and components," International Economics, Elsevier, vol. 161(C), pages 219-236.
    2. Jean Balié & Davide Del Prete & Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci, 2017. "Agriculture and Food Global Value Chains in Sub-Saharan Africa: Does bilateral trade policy impact on backward and forward participation?," Working Papers 4/17, Sapienza University of Rome, DISS.
    3. Virginia Di Nino & Anna Ekstam, 2020. "What value added in the trade balances of euro area financial centres?," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Bridging measurement challenges and analytical needs of external statistics: evolution or revolution?, volume 52, Bank for International Settlements.
    4. Cabrillac, Bruno & Al-Haschimi, Alexander & Babecká Kucharčuková, Oxana & Borin, Alessandro & Bussière, Matthieu & Cezar, Raphael & Derviz, Alexis & Dimitropoulou, Dimitra & Ferrara, Laurent & Gächter, 2016. "Understanding the weakness in global trade - What is the new normal?," Occasional Paper Series 178, European Central Bank.
    5. Matteo Bugamelli & Silvia Fabiani & Stefano Federico & Alberto Felettigh & Claire Giordano & Andrea Linarello, 2018. "Back on Track? A Macro–Micro Narrative of Italian Exports," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(1), pages 1-31, March.
    6. K. Buysse & E. Vincent, 2015. "Factors explaining emerging economies’ growth slowdown," Economic Review, National Bank of Belgium, issue ii, pages 61-79, september.
    7. Rita Cappariello & Michele Mancini, 2019. "US trade policy in numbers: how exposed is the EU?," Questioni di Economia e Finanza (Occasional Papers) 528, Bank of Italy, Economic Research and International Relations Area.
    8. Aleksandra Kordalska & Magdalena Olczyk, 2019. "Is Germany A Hub Of Factory Europe For Cee Countries? The Sink Approach In Gvc Decomposition," GUT FME Working Paper Series A 56, Faculty of Management and Economics, Gdansk University of Technology.
    9. Di Nino, Virginia & Veltri, Bruno, 2020. "The viral effects of foreign trade and supply networks in the euro area," Economic Bulletin Articles, European Central Bank, vol. 6.
    10. Bouët, Antoine & Cosnard, Lionel & Laborde, David, 2017. "Measuring Trade Integration in Africa," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 32(4), pages 937-977.
    11. Silvia Fabiani & Alberto Felettigh & Alfonso Rosolia, 2020. "Autarchy along the distribution," Questioni di Economia e Finanza (Occasional Papers) 580, Bank of Italy, Economic Research and International Relations Area.
    12. Belotti,Federico & Borin,Alessandro & Mancini,Michele, 2020. "icio : Economic Analysis with Inter-Country Input-Output Tables in Stata," Policy Research Working Paper Series 9156, The World Bank.
    13. ye, ming, 2016. "Trace the goods and value-added route in exports," MPRA Paper 73476, University Library of Munich, Germany.
    14. Zhang, Zengkai & Zhu, Kunfu & Hewings, Geoffrey J.D., 2017. "A multi-regional input–output analysis of the pollution haven hypothesis from the perspective of global production fragmentation," Energy Economics, Elsevier, vol. 64(C), pages 13-23.
    15. Alessandro Antimiani & Luca Salvatici & Ilaria Fusacchia, 2018. "GTAP-VA: An Integrated Tool for Global Value Chain Analysis," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 3(2), pages 69-105, December.
    16. Borin, Alessandro & Di Nino, Virginia & Mancini, Michele & Sbracia, Massimo, 2016. "The Cyclicality of the Income Elasticity of Trade," MPRA Paper 73000, University Library of Munich, Germany.
    17. Jaime Martinez-Martin, 2016. "Breaking down world trade elasticities: a panel ECM approach," Globalization Institute Working Papers 275, Federal Reserve Bank of Dallas.
    18. Carlo Altomonte & Laura Bonacorsi & Italo Colantobe, 2018. "Trade and Growth in the Age of Global Value Chains," BAFFI CAREFIN Working Papers 1897, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    19. Laura Dell'Agostino, 2017. "Italy’S Participation In International Supply And Production Networks Using Value Added Trade Data," Departmental Working Papers of Economics - University 'Roma Tre' 0228, Department of Economics - University Roma Tre.
    20. Simona Giglioli & Giorgia Giovannetti & Enrico Marvasi & Arianna Vivoli, 2021. "The Resilience of Global Value Chains during the Covid-19 pandemic: the case of Italy," Working Papers - Economics wp2021_07.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    21. Gunnella, Vanessa & Al-Haschimi, Alexander & Benkovskis, Konstantins & Chiacchio, Francesco & de Soyres, François & Di Lupidio, Benedetta & Fidora, Michael & Franco-Bedoya, Sebastian & Frohm, Erik & G, 2019. "The impact of global value chains on the euro area economy," Occasional Paper Series 221, European Central Bank.
    22. Wolfgang Britz & Hasan Dudu & Ilaria Fusacchia & Yaghoob Jafari & Roberto Roson & Luca Salvatici & Martina Sartori, 2019. "Economy-wide analysis of food waste reductions and related costs," JRC Working Papers JRC113395, Joint Research Centre (Seville site).
    23. Zhang, Zengkai & Lin, Jintai, 2018. "From production-based to consumption-based regional carbon inventories: Insight from spatial production fragmentation," Applied Energy, Elsevier, vol. 211(C), pages 549-567.
    24. Sara Formai & Filippo Vergara Caffarelli, 2016. "Quantifying the productivity effects of global sourcing," Temi di discussione (Economic working papers) 1075, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    global value chains; input-output tables; trade in value added; trade elasticity;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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