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Decompr: Global Value Chain Decomposition In R

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Abstract

Global Value Chains have become a central unit of analysis in research on international trade. However, the complex matrix transformations at the basis of most Value Chain indicators still constitute a significant entry barrier to the field. The R package decompr solves this problem by implementing the algorithms for the analysis of Global Value Chains as R procedures, thereby simplifying the decomposition process. Two methods for gross export flow decomposition using Inter-Country Input-Output tables are provided. The first method concerns a decomposition based on the classical Leontief (1936) insight. It derives the value added origins of an industry's exports by source country and source industry, using easily available gross trade data. The second method is the Wang-Wei-Zhu algorithm, which splits bilateral gross exports into 16 value added components. These components can broadly be divided into domestic and foreign value added in exports. Using the results of the two decompositions, decompr provides a set of Global Value Chain indicators, such as the now standard Vertical Specialisation ratio. This article summarises the methodology of the algorithms, describes the format of the input and output data, and exemplifies the usefulness of the two methods on the basis of a simple example data set.

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  • Bastiaan Quast & Victor Kummritz, 2015. "Decompr: Global Value Chain Decomposition In R," CTEI Working Papers series 01-2015, Centre for Trade and Economic Integration, The Graduate Institute.
  • Handle: RePEc:gii:cteiwp:ctei-2015-01
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    1. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
    2. Zhi Wang & Shang-Jin Wei & Kunfu Zhu, 2013. "Quantifying International Production Sharing at the Bilateral and Sector Levels," NBER Working Papers 19677, National Bureau of Economic Research, Inc.
    3. 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.
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    Cited by:

    1. 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.
    2. João Amador & Sónia Cabral, 2017. "Networks of Value-added Trade," The World Economy, Wiley Blackwell, vol. 40(7), pages 1291-1313, July.
    3. Constantinescu, Cristina & Mattoo, Aaditya & Ruta, Michele, 2016. "Does the global trade slowdown matter?," Journal of Policy Modeling, Elsevier, vol. 38(4), pages 711-722.
    4. Woori Lee, 2017. "Services liberalization and GVC participation: New evidence for heterogeneous effects by income level and provisions," CTEI Working Papers series 08-2017, Centre for Trade and Economic Integration, The Graduate Institute.
    5. Magdalena Olczyk & Aleksandra Kordalska, 2017. "Gross Exports Versus Value-Added Exports: Determinants and Policy Implications for Manufacturing Sectors in Selected CEE Countries," Eastern European Economics, Taylor & Francis Journals, vol. 55(1), pages 91-109, January.
    6. Jan Hagemejer, 2016. "Exports and growth in the New Member States. The role of global value chains," Working Papers 2016-24, Faculty of Economic Sciences, University of Warsaw.
    7. Victor Kummritz, 2016. "Do Global Value Chains Cause Industrial Development?," CTEI Working Papers series 01-2016, Centre for Trade and Economic Integration, The Graduate Institute.
    8. Aleksandra Kordalska & Magdalena Olczyk, 2018. "CEE Trade in Services: Value-Added Versus Gross Terms Approaches," Eastern European Economics, Taylor & Francis Journals, vol. 56(4), pages 269-291, July.
    9. João Amador & Sónia Cabral, 2015. "Networks of value added trade," Working Papers w201516, Banco de Portugal, Economics and Research Department.
    10. repec:krk:eberjl:v:5:y:2017:i:2:p:9-25 is not listed on IDEAS
    11. Rossana Mastrandrea & Franco Ruzzenenti & João Amador & Sónia Cabral, 2017. "Who's who in global value chains? A weighted network approach," Working Papers w201707, Banco de Portugal, Economics and Research Department.
    12. Kummritz,Victor & Taglioni,Daria & Winkler,Deborah Elisabeth & Kummritz,Victor & Taglioni,Daria & Winkler,Deborah Elisabeth, 2017. "Economic upgrading through global value chain participation : which policies increase the value added gains ?," Policy Research Working Paper Series 8007, The World Bank.
    13. Victor Kummritz, 2015. "Global Value Chains: Benefiting the Domestic Economy?," IHEID Working Papers 02-2015, Economics Section, The Graduate Institute of International Studies.

    More about this item

    Keywords

    Global Value Chains; Trade in Value Added; Export Decomposition;

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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