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Measuring bilateral trade in terms of value added

Author

Listed:
  • Inaki Arto

    (Basque Centre for Climate Change – BC3)

  • Erik Dietzenbacher

    (University of Groningen)

  • Jose Manuel Rueda-Cantuche

    (European Commission - JRC)

Abstract

The increase in the fragmentation of production across countries and the subsequent growth in the trade of intermediate products have raised concerns about the suitability of conventional trade statistics to understand the economic consequences of trade. Several authors have attempted to disentangle value added content of trade. This technical report proposes a novel framework that enables to: 1 fully decompose the factor content of bilateral trade measured at the border; and 2 account for the role of the different countries and industries participating in the global value chain. Furthermore, because of the country and industry detail of this approach, it able to provide a new extension of the standard value added to exports ratio, and also reconcile the "sink-based" and "source-based" methods commonly used to report the value added in trade.

Suggested Citation

  • Inaki Arto & Erik Dietzenbacher & Jose Manuel Rueda-Cantuche, 2019. "Measuring bilateral trade in terms of value added," JRC Research Reports JRC116694, Joint Research Centre.
    • Handle: RePEc:ipt:iptwpa:jrc116694
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    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC116694
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    References listed on IDEAS

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    Cited by:

    1. William Connell Garcia & Magdalena Kizior & Wouter Simons, 2020. "Analysing Automobile Industry Supply Chains," European Economy - Discussion Papers 134, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Robert Stehrer, 2021. "Source – Assembly – Sink: Value Added Flows in the Global Economy," wiiw Working Papers 209, The Vienna Institute for International Economic Studies, wiiw.
    3. Inaki Arto & Jose M. Rueda-Cantuche & M. Victoria Roman & Ignacio Cazcarro & Antonio F. Amores & Erik Dietzenbacher, 2020. "EU trade in CO2 emissions," JRC Research Reports JRC120523, Joint Research Centre.
    4. Marta Fana & Davide Villani, 2021. "The Automotive Supply Chain in Europe: An Input-Output Analysis of Value Added and Employment Composition," JRC Working Papers on Labour, Education and Technology 2021-01, Joint Research Centre.
    5. Klemen Knez & Andreja Jaklič & Metka Stare, 2021. "An extended approach to value chain analysis," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-37, December.
    6. Inaki Arto & Jose M. Rueda-Cantuche & M. Victoria Roman & Ignacio Cazcarro & Antonio F. Amores & Erik Dietzenbacher, 2020. "EU Trade in Value Added," JRC Research Reports JRC120522, Joint Research Centre.
    7. MARSCHINSKI Robert & DE AMORES HERNANDEZ Antonio & AMOROSO Sara & BAUER Peter & CARDANI Roberta & CSEFALVAY Zoltan & GENTY Aurelien & GKOTSIS Petros & GREGORI Wildmer & GRASSANO Nicola & HERNANDEZ GUE, 2021. "EU competitiveness: recent trends, drivers, and links to economic policy: A Synthesis Report," JRC Research Reports JRC123232, Joint Research Centre.
    8. Inaki Arto & Jose M. Rueda-Cantuche & M. Victoria Roman & Ignacio Cazcarro & Antonio F. Amores & Erik Dietzenbacher, 2020. "EU trade in Employment," JRC Research Reports JRC120520, Joint Research Centre.
    9. Fana, Marta & Villani, Davide, 2022. "Decomposing the Automotive Supply Chain: Employment, Value Added and Occupational Structure," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 407-419.
    10. Maria Llop, 2022. "Quantifying the employment impacts of gross exports: a global accounting perspective," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-17, December.

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    More about this item

    Keywords

    global value chain; vertical specialization; international trade;
    All these keywords.

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • 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
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis

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