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Characterizing Global Value Chains: Production Length and Upstreamness

Author

Listed:
  • Zhi Wang
  • Shang-Jin Wei
  • Xinding Yu
  • Kunfu Zhu

Abstract

We develop a new set of country-sector level indicators of Global Value Chains (GVCs) characteristics in terms of average production length, and relative “upstreamness” on a production network, which we argue are better than the existing ones in the literature. We distinguish production activities into four types: those whose value added is both generated and absorbed within the country, those whose value-added crosses borders only once for consumption, those whose value added crosses borders only once for production, and those whose value added crosses borders more than once. Based on such an accounting framework, we further decompose total production length into different segments. Using these measures, we characterize cross-country production sharing patterns and their evolution for 56 sectors and 44 countries over 2000-2014. While the production chain has become longer for the world as a whole, there are interesting variations across countries and sectors.

Suggested Citation

  • Zhi Wang & Shang-Jin Wei & Xinding Yu & Kunfu Zhu, 2017. "Characterizing Global Value Chains: Production Length and Upstreamness," NBER Working Papers 23261, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23261
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    References listed on IDEAS

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    1. Pol Antràs & Davin Chor, 2013. "Organizing the Global Value Chain," Econometrica, Econometric Society, vol. 81(6), pages 2127-2204, November.
    2. repec:ucp:jpolec:doi:10.1086/700935 is not listed on IDEAS
    3. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2014. "Tracing Value-Added and Double Counting in Gross Exports," American Economic Review, American Economic Association, vol. 104(2), pages 459-494, February.
    4. Pol Antras & Davin Chor & Thibault Fally & Russell Hillberry, 2012. "Measuring the Upstreamness of Production and Trade Flows," American Economic Review, American Economic Association, vol. 102(3), pages 412-416, May.
    5. Laura Alfaro & Pol Antràs & Davin Chor & Paola Conconi, 2019. "Internalizing Global Value Chains: A Firm-Level Analysis," Journal of Political Economy, University of Chicago Press, vol. 127(2), pages 508-559.
    6. 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.
    7. 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.
    8. 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.
    9. Erik Dietzenbacher & Isidoro Romero, 2007. "Production Chains in an Interregional Framework: Identification by Means of Average Propagation Lengths," International Regional Science Review, , vol. 30(4), pages 362-383, October.
    10. 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. Shang-Jin Wei & Yinxi Xie, 2018. "The Wedge of the Century: Understanding a Divergence between CPI and PPI Inflation Measures," NBER Working Papers 24319, National Bureau of Economic Research, Inc.
    2. repec:eee:phsmap:v:516:y:2019:i:c:p:19-36 is not listed on IDEAS
    3. Di Filippo, Gabriele, 2018. "What Place does Luxembourg hold in Global Value Chains?," MPRA Paper 86235, University Library of Munich, Germany.
    4. repec:eee:phsmap:v:502:y:2018:i:c:p:164-184 is not listed on IDEAS
    5. repec:tpr:asiaec:v:17:y:2018:i:2:p:50-64 is not listed on IDEAS

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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