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Bilateral Equivalence between Trade in Value Added and Value Added Content of Trade

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  • Kuboniwa, Masaaki

Abstract

This paper demonstrates that the bilateral equivalence between trade in value added (TiVA) and value added content of trade. TiVA, based on value added exports, which is proposed by Johnson-Noguera and OECD-WTO, measures origin country’s value added exports induced by each destination country’s final demand, excluding intermediates, for the world. Value added content of trade or “value added in trade (VAiT),” which is proposed by Trefler and followed by Stehrer, measures value added induced by appropriately arranged gross trade, including intermediates. At a glance, these two measures may look quite different. This paper shows that in the world with two countries and many countries these two measures of TiVA and value added content of trade are bilaterally equivalent.

Suggested Citation

  • Kuboniwa, Masaaki, 2014. "Bilateral Equivalence between Trade in Value Added and Value Added Content of Trade," Discussion Paper Series 601, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hituec:601
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/26432/DP601.pdf
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    References listed on IDEAS

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    1. Foster-McGregor, Neil & Stehrer, Robert, 2013. "Value added content of trade: A comprehensive approach," Economics Letters, Elsevier, vol. 120(2), pages 354-357.
    2. Trefler, Daniel & Zhu, Susan Chun, 2010. "The structure of factor content predictions," Journal of International Economics, Elsevier, vol. 82(2), pages 195-207, November.
    3. Marcel Timmer & Abdul A. Erumban & Reitze Gouma & Bart Los & Umed Temurshoev & Gaaitzen J. de Vries & I–aki Arto & Valeria Andreoni AurŽlien Genty & Frederik Neuwahl & JosŽ M. Rueda?Cantuche & Joseph , 2012. "The World Input-Output Database (WIOD): Contents, Sources and Methods," IIDE Discussion Papers 20120401, Institue for International and Development Economics.
    4. Kuboniwa, Masaaki, 2014. "Trade in Value Added Revisited: A Comment on R. Johnson and G. Noguera, Accounting for Intermediates: Production Sharing and Trade in Value Added," Discussion Paper Series 598, Institute of Economic Research, Hitotsubashi University.
    5. Kuboniwa, Masaaki, 2014. "Fundamental Theorem on the Relationship between Trade Balances in Value Added and Gross Terms: Amendment," Discussion Paper Series 600, Institute of Economic Research, Hitotsubashi University.
    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. Robert Stehrer, 2013. "Accounting Relations in Bilateral Value Added Trade," wiiw Working Papers 101, The Vienna Institute for International Economic Studies, wiiw.
    8. Robert Stehrer, 2012. "Trade in Value Added and the Valued Added in Trade," wiiw Working Papers 81, The Vienna Institute for International Economic Studies, wiiw.
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    1. repec:gdk:wpaper:40 is not listed on IDEAS
    2. Kuboniwa, Masaaki, 2014. "Russia’s Global Value Chain using a Modified World Input-Output Data," RRC Working Paper Series 50, Russian Research Center, Institute of Economic Research, Hitotsubashi University.

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    More about this item

    Keywords

    trade in value added; value added content of trade; gross trade; input-output;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F19 - International Economics - - Trade - - - Other
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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