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Decompr: Global Value Chain Decomposition In R

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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. 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. 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.
    3. 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.
    4. Constantinescu, Cristina & Mattoo, Aaditya & Ruta, Michele, 2016. "Does the global trade slowdown matter?," Journal of Policy Modeling, Elsevier, vol. 38(4), pages 711-722.
    5. Escaith, Hubert, 2021. "Withering globalization? The Global Value Chain effects of trade decoupling," MPRA Paper 107935, University Library of Munich, Germany.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. Victor Kummritz, 2015. "Global Value Chains: Benefiting the Domestic Economy?," IHEID Working Papers 02-2015, Economics Section, The Graduate Institute of International Studies.
    11. 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.
    12. Mauro Boffa & Marion Jansen & Olga Solleder, 2021. "Participating to Compete: Do Small Firms in Developing Countries Benefit from Global Value Chains?," Economies, MDPI, vol. 9(1), pages 1-25, February.
    13. João Amador & Sónia Cabral, 2017. "Networks of Value-added Trade," The World Economy, Wiley Blackwell, vol. 40(7), pages 1291-1313, July.
    14. 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.
    15. 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.
    16. 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.
    17. Escaith, Hubert & Khorana, Sangeeta, 2020. "Mapping the Commonwealth Countries’ Participation in Global Value Chains," MPRA Paper 104441, University Library of Munich, Germany.
    18. Escaith, Hubert, 2020. "Contrasting Revealed Comparative Advantages when Trade is (also)in Intermediate Products," MPRA Paper 103666, University Library of Munich, Germany.
    19. 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.
    20. 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.

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    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

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