Trade in Value Added and the Valued Added in Trade
This paper discussed two measures of value added flows between countries ‘Trade in value added’ accounts for value added of one country directly and indirectly embodied in final consumption of another country. ‘Value added in trade’ measures the value added embodied in gross trade flows. The paper shows that both measures result in the same overall net trade of a country which equals its trade balance in gross terms which however does not hold for bilateral relations. These value added flows can further be broken down by various production factors including capital and labour income by educational attainment categories. Using the recently compiled World Input-Output Database (WIOD) selected results comparing the EU-27, the USA, Japan and China based on both concepts regarding value added flows across countries are presented. For example, the US trade deficit with China is reduced by about 25% but would increase with respect to the EU-27 by about 20%. These imbalances are further broken down by factor incomes.
|Length:||20 pages including 7 Tables and 1 Figure|
|Date of creation:||Jun 2012|
|Date of revision:|
|Publication status:||Published as wiiw Working Paper|
|Contact details of provider:|| Postal: Rahlgasse 3, A-1060 Vienna|
Phone: (+43-1) 533 66 10
Fax: (+43-1) 533 66 10-50
Web page: http://www.wiiw.ac.at
More information through EDIRC
|Order Information:||Web: http://wiiw.ac.at|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Staiger, Robert W., 1986. "Measurement of the factor content of foreign trade with traded intermediate goods," Journal of International Economics, Elsevier, vol. 21(3-4), pages 361-368, November.
- Umed Temurshoev & Marcel P. Timmer, 2011.
"Joint estimation of supply and use tables,"
Papers in Regional Science,
Wiley Blackwell, vol. 90(4), pages 863-882, November.
- Helpman, Elhanan, 1984. "The Factor Content of Foreign Trade," Economic Journal, Royal Economic Society, vol. 94(373), pages 84-94, March.
- Robert Koopman & William Powers & Zhi Wang & Shang-Jin Wei, 2011.
"Give Credit where Credit is Due: Tracing Value Added in Global Production Chains,"
312011, Hong Kong Institute for Monetary Research.
- Robert Koopman & William Powers & Zhi Wang & Shang-Jin Wei, 2010. "Give Credit Where Credit Is Due: Tracing Value Added in Global Production Chains," NBER Working Papers 16426, National Bureau of Economic Research, Inc.
- Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2009.
"Who produces for whom in the world economy?,"
Sciences Po publications
2009-18, Sciences Po.
- Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2009. "Who produces for whom in the world economy?," Working Papers hal-01066205, HAL.
- Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2011. "Who Produces for Whom in the World Economy?," Post-Print halshs-00924985, HAL.
- Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2009. "Who produces for whom in the world economy?," Documents de Travail de l'OFCE 2009-18, Observatoire Francais des Conjonctures Economiques (OFCE).
- Timmer,Marcel P. & Inklaar,Robert & O'Mahony,Mary & Ark,Bart van, 2013.
"Economic Growth in Europe,"
Cambridge University Press, number 9781107412446, September.
- Trefler, Daniel & Zhu, Susan Chun, 2010.
"The structure of factor content predictions,"
Journal of International Economics,
Elsevier, vol. 82(2), pages 195-207, November.
- Yuqing Xing & Neal Detert, 2010. "How iPhone Widens the US Trade Deficits with the PRC?," GRIPS Discussion Papers 10-21, National Graduate Institute for Policy Studies.
- 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.
When requesting a correction, please mention this item's handle: RePEc:wii:wpaper:81. 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: (Customer service)
If references are entirely missing, you can add them using this form.