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Identifying Heterogeneity in the Production Components of Globally Engaged Business Enterprises in the United States

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  • James Fetzer
  • Erich Strassner

Abstract

Recent research has shown both the importance of accounting for trade in value added when estimating bilateral trade flows and that multinational enterprises located in the U.S. account for the lion’s share of U.S. trade in goods and services. However, trade in value added is typically accounted for using input-output tables that are aggregated across all types of firms. This paper presents experimental tables created by the U.S. Bureau of Economic Analysis comparing industry specific shares of the components of total output between globally engaged firms located in the United States that are part of a multinational enterprise (U.S. parents and U.S. affiliates) with those of firms that are part of an enterprise entirely located in the United States. The experimental tables will show to the extent possible how the components of total output differ between different types of firms. Future work will analyze this heterogeneity in more detail using establishment level data on production and trade.

Suggested Citation

  • James Fetzer & Erich Strassner, 2015. "Identifying Heterogeneity in the Production Components of Globally Engaged Business Enterprises in the United States," EcoMod2015 8741, EcoMod.
    • Handle: RePEc:ekd:008007:8741
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    References listed on IDEAS

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    1. William J. Zeile, 1998. "Imported Inputs and the Domestic Content of Production by Foreign-Owned Manufacturing Affiliates in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 205-234, National Bureau of Economic Research, Inc.
    2. Timothy Dunne & J. Bradford Jensen & Mark J. Roberts, 2009. "Introduction to "Producer Dynamics: New Evidence from Micro Data"," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 1-12, National Bureau of Economic Research, Inc.
    3. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    4. Timothy Dunne & J. Bradford Jensen & Mark J. Roberts, 2009. "Producer Dynamics: New Evidence from Micro Data," NBER Books, National Bureau of Economic Research, Inc, number dunn05-1, March.
    5. Charles R. Hulten & Marshall B. Reinsdorf, 2015. "Measuring Wealth and Financial Intermediation and Their Links to the Real Economy," NBER Books, National Bureau of Economic Research, Inc, number hult10-1, March.
    6. 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.
    7. Ma, Hong & Wang, Zhi & Zhu, Kunfu, 2015. "Domestic content in China’s exports and its distribution by firm ownership," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 3-18.
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    Cited by:

    1. Johannes Eugster & Giovanni Donato, 2022. "The exchange rate elasticity of the Swiss current account," Working Papers 2022-14, Swiss National Bank.
    2. James J. Fetzer & Tina Highfill & Kassu W. Hossiso & Thomas F. Howells III & Erich H. Strassner & Jeffrey A. Young, 2021. "Accounting for Firm Heterogeneity within US Industries: Extended Supply-Use Tables and Trade in Value Added Using Enterprise and Establishment Level Data," NBER Chapters, in: Challenges of Globalization in the Measurement of National Accounts, pages 311-342, National Bureau of Economic Research, Inc.
    3. ITO Koji & Ivan DESEATNICOV & FUKAO Kyoji, 2017. "Japanese Plants' Heterogeneity in Sales, Factor Inputs, and Participation in Global Value Chains," Discussion papers 17117, Research Institute of Economy, Trade and Industry (RIETI).
    4. Fabienne Fortanier & Guannan Miao & Ans Kolk & Niccolò Pisani, 2020. "Accounting for firm heterogeneity in global value chains," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(3), pages 432-453, April.
    5. Jon Samuels & Erich Strassner, 2019. "Toward a Global Integrated Industry-level Production Account: A Proposal," International Productivity Monitor, Centre for the Study of Living Standards, vol. 36, pages 7-33, Spring.
    6. 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," BEA Working Papers 0158, Bureau of Economic Analysis.
    7. Mario Marcel & Diego Vivanco, 2021. "Measuring Small and Medium-Size Enterprises Contribution to Trade in Value Added: The case of Chile 2013-2016," Working Papers Central Bank of Chile 914, Central Bank of Chile.
    8. Fetzer, James & Howells III, Thomas F. & Jones, Lin & Strassner, Erich & Wang, Zhi, 2016. "Estimating Extended Supply‐Use Tables in Basic Prices with Firm Heterogeneity for the United States: A Proof of Concept," Conference papers 332686, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. James J. Fetzer & Thomas F. Howells III & Lin Z. Jones & Erich H. Strassner & Zhi Wang, 2018. "Estimating Extended Supply-Use Tables in Basic Prices with Firm Heterogeneity for the United States: A Proof of Concept," BEA Working Papers 0159, Bureau of Economic Analysis.

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    Keywords

    United States; Trade and regional integration; General equilibrium modeling (CGE);
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