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An Anatomy of U.S. Establishments’ Trade Linkages in Global Value Chains

Author

Listed:
  • Aaron Flaaen
  • Fariha Kamal
  • Eunhee Lee
  • Kei-Mu Yi

Abstract

Global value chains (GVC) are a pervasive feature of modern production, but they are hard to measure. Using confidential microdata from the U.S. Census Bureau, we develop novel measures of the linkages between U.S. manufacturing establishments’ imports and exports. We find that for every dollar of exports, imported inputs represent 13 cents in 2002 and 20 cents by 2017. Examining GVC trade flows in a gravity framework, we find that these flows are higher within “round-trip” (input and output market is the same) linkages, regional trade agreements, and multinational firm boundaries. The strong complementarities between input and output markets are muted by the proportionality assumptions embedded in global input-output tables. Finally, with an off-the-shelf model, we show the round-trip results can be obtained when firm-specific sourcing and exporting fixed costs are linked.

Suggested Citation

  • Aaron Flaaen & Fariha Kamal & Eunhee Lee & Kei-Mu Yi, 2025. "An Anatomy of U.S. Establishments’ Trade Linkages in Global Value Chains," Working Papers 25-44, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:25-44
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    References listed on IDEAS

    as
    1. Xiang Ding & Teresa C. Fort & Stephen J. Redding & Peter K. Schott, 2019. "Structural Change Within Versus Across Firms: Evidence from the United States," Working Papers 2019-9, Princeton University. Economics Department..
    2. Kyle Handley & Fariha Kamal & Ryan Monarch, 2025. "Rising Import Tariffs, Falling Exports: When Modern Supply Chains Meet Old-Style Protectionism," American Economic Journal: Applied Economics, American Economic Association, vol. 17(1), pages 208-238, January.
    3. Timmer, Marcel P. & Los, Bart & Stehrer, Robert & de Vries, Gaaitzen J., 2016. "An Anatomy of the Global Trade Slowdown based on the WIOD 2016 Release," GGDC Research Memorandum GD-162, Groningen Growth and Development Centre, University of Groningen.
    4. Kyle Handley & Fariha Kamal & Wei Ouyang, 2021. "A Long View of Employment Growth and Firm Dynamics in the United States: Importers vs. Exporters vs. Non-Traders," Working Papers 21-38, Center for Economic Studies, U.S. Census Bureau.
    5. Deborah Winkler, William Milberg, 2009. "WP 2009-12 Errors from the “Proportionality Assumption†in the Measurement of Offshoring: Application to German Labor Demand," SCEPA working paper series. 2009-12, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
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    Keywords

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    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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