IDEAS home Printed from https://ideas.repec.org/p/gii/cteiwp/ctei-2015-01.html
   My bibliography  Save this paper

Decompr: Global Value Chain Decomposition In R

Author

Listed:

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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: http://graduateinstitute.ch/files/live/sites/iheid/files/sites/ctei/shared/CTEI/working_papers/CTEI-2015-01_Quast,%20Kummritz.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. 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.
    4. Jan Hagemejer, 2018. "Trade and Growth in the New Member States: The Role of Global Value Chains," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(11), pages 2630-2649, September.
    5. Woori Lee, 2019. "Services liberalization and global value chain participation: New evidence for heterogeneous effects by income level and provisions," Review of International Economics, Wiley Blackwell, vol. 27(3), pages 888-915, August.
    6. 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.
    7. Victor Stolzenburg & Daria Taglioni & Deborah Winkler, 2019. "Economic upgrading through global value chain participation: which policies increase the value-added gains?," Chapters, in: Stefano Ponte & Gary Gereffi & Gale Raj-Reichert (ed.), Handbook on Global Value Chains, chapter 30, pages 483-505, Edward Elgar Publishing.
    8. João Amador & Sónia Cabral & Rossana Mastrandrea & Franco Ruzzenenti, 2018. "Who’s Who in Global Value Chains? A Weighted Network Approach," Open Economies Review, Springer, vol. 29(5), pages 1039-1059, November.
    9. Escaith, Hubert & Khorana, Sangeeta, 2020. "Mapping the Commonwealth Countries’ Participation in Global Value Chains," MPRA Paper 104441, University Library of Munich, Germany.
    10. Constantinescu, Cristina & Mattoo, Aaditya & Ruta, Michele, 2016. "Does the global trade slowdown matter?," Journal of Policy Modeling, Elsevier, vol. 38(4), pages 711-722.
    11. Escaith, Hubert, 2020. "Contrasting Revealed Comparative Advantages when Trade is (also)in Intermediate Products," MPRA Paper 103666, University Library of Munich, Germany.
    12. 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.
    13. Escaith, Hubert, 2021. "Withering globalization? The Global Value Chain effects of trade decoupling," MPRA Paper 107935, University Library of Munich, Germany.
    14. Bekkers, Eddy & Schroeter, Sofia, 2020. "An economic analysis of the US-China trade conflict," WTO Staff Working Papers ERSD-2020-04, World Trade Organization (WTO), Economic Research and Statistics Division.
    15. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2017. "Workers, Firms and Task Heterogeneity in International Trade Analysis: An Example of Wage Effects of Trade Within GVC," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 5(2), pages 9-25.
    16. Victor Kummritz, 2015. "Global Value Chains: Benefiting the Domestic Economy?," IHEID Working Papers 02-2015, Economics Section, The Graduate Institute of International Studies.
    17. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2019. "Global Value Chains and Wages: Multi-Country Evidence from Linked Worker-Industry Data," Open Economies Review, Springer, vol. 30(3), pages 505-539, July.
    18. Mauro Boffa & Marion Jansen & Olga Solleder, 2021. "Participating to Compete: Do Small Firms in Developing Countries Benefit from Global Value Chains?," Economies, MDPI, Open Access Journal, vol. 9(1), pages 1-25, February.
    19. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2020. "Wage response to global production links: evidence for workers from 28 European countries (2005–2014)," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(4), pages 769-801, November.
    2. Arne J. Nagengast & Robert Stehrer, 2016. "Accounting for the Differences Between Gross and Value Added Trade Balances," The World Economy, Wiley Blackwell, vol. 39(9), pages 1276-1306, September.
    3. Inaki Arto & Erik Dietzenbacher & Jose Manuel Rueda-Cantuche, 2019. "Measuring bilateral trade in terms of value added," JRC Working Papers JRC116694, Joint Research Centre (Seville site).
    4. Pierluigi Montalbano & Silvia Nenci & Carlo Pietrobelli, 2018. "Opening and linking up: firms, GVCs, and productivity in Latin America," Small Business Economics, Springer, vol. 50(4), pages 917-935, April.
    5. Zhao, Yuhuan & Liu, Ya & Qiao, Xiaoyong & Wang, Song & Zhang, Zhonghua & Zhang, Yongfeng & Li, Hao, 2018. "Tracing value added in gross exports of China: Comparison with the USA, Japan, Korea, and India based on generalized LMDI," China Economic Review, Elsevier, vol. 49(C), pages 24-44.
    6. Shen, Leilei & Silva, Peri, 2018. "Value-added exports and U.S. local labor markets: Does China really matter?," European Economic Review, Elsevier, vol. 101(C), pages 479-504.
    7. Cosimo Beverelli & Victor Stolzenburg & Robert B. Koopman & Simon Neumueller, 2019. "Domestic value chains as stepping stones to global value chain integration," The World Economy, Wiley Blackwell, vol. 42(5), pages 1467-1494, May.
    8. Jangam, Bhushan Praveen & Rath, Badri Narayan, 2020. "Cross-country convergence in global value chains: Evidence from club convergence analysis," International Economics, Elsevier, vol. 163(C), pages 134-146.
    9. Zhou, Yan & Chen, Shumei & Chen, Mei, 2019. "Global value chain, regional trade networks and Sino-EU FTA," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 26-38.
    10. Aichele, Rahel & Heiland, Inga, 2018. "Where is the value added? Trade liberalization and production networks," Journal of International Economics, Elsevier, vol. 115(C), pages 130-144.
    11. Xu, Xueliu & Wang, Qian & Ran, Chenyang & Mu, Mingjie, 2021. "Is burden responsibility more effective? A value-added method for tracing worldwide carbon emissions," Ecological Economics, Elsevier, vol. 181(C).
    12. Syed Al-Helal Uddin, 2016. "Value-added Trade, Exchange Rate Pass-Through and Trade Elasticity: Revisiting the Trade Competitiveness," 2016 Papers pud11, Job Market Papers.
    13. Bo Meng & Ming Ye & Shang‐Jin Wei, 2020. "Measuring Smile Curves in Global Value Chains," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(5), pages 988-1016, October.
    14. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 0. "Wage response to global production links: evidence for workers from 28 European countries (2005–2014)," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 0, pages 1-33.
    15. Boya Zhang & Shukuan Bai & Yadong Ning & Tao Ding & Yan Zhang, 2020. "Emission Embodied in International Trade and Its Responsibility from the Perspective of Global Value Chain: Progress, Trends, and Challenges," Sustainability, MDPI, Open Access Journal, vol. 12(8), pages 1-26, April.
    16. Ilaria Fusacchia, 2020. "Evaluating the Impact of the US–China Trade War on Euro Area Economies: A Tale of Global Value Chains," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(3), pages 441-468, November.
    17. Hongsheng Zhang & Bo Meng & Shuzhong Ma, 2018. "Determinants of China's bilateral trade balance in global value chains," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 27(5), pages 463-485, July.
    18. Ando, Asao & Meng, Bo, 2016. "A unified framework of trade in value added : physical, monetary, exchange rates, and GHG emissions," IDE Discussion Papers 563, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    19. Borin, Alessandro & Mancini, Michele, 2017. "Follow the Value Added: Tracking Bilateral Relations in Global Value Chains," MPRA Paper 82692, University Library of Munich, Germany.
    20. Rita Cappariello & Alberto Felettigh, 2015. "How does foreign demand activate domestic value added? A comparison among the largest euro-area economies," Temi di discussione (Economic working papers) 1001, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    Global Value Chains; Trade in Value Added; Export Decomposition;
    All these keywords.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gii:cteiwp:ctei-2015-01. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/ctheich.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Victor Kummritz (email available below). General contact details of provider: https://edirc.repec.org/data/ctheich.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.