Working Paper: CEPR ID: DP12549
Authors: Pol Antras; Davin Chor
Abstract: This paper offers four contributions to the empirical literature on global value chains (GVCs). First, we provide a succinct overview of several measures developed to capture the upstreamness or downstreamness of industries and countries in GVCs. Second, we employ data from the World Input-Output Database (WIOD) to document the empirical evolution of these measures over the period 1995-2011; in doing so, we highlight salient patterns related to countries’ GVC positioning - as well as some puzzling correlations - that emerge from the data. Third, we develop a theoretical framework - which builds on Caliendo and Parro’s (2015) variant of the Eaton and Kortum (2002) model - that provides a structural interpretation of all the entries of the WIOD in a given year. Fourth, we resort to a calibrated version of the model to perform counterfactual exercises that: (i) sharpen our understanding of the independent effect of several factors in explaining the observed empirical patterns in the period 1995-2011; and (ii) provide guidance for how future changes in the world economy are likely to shape the positioning of countries in GVCs.
Keywords: upstreamness; downstreamness; input-output tables; global value chains
JEL Codes: D5; F1; F2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| final-use shares (fgo) (G30) | value-added over gross output ratios (v ago) (O40) |
| trade costs (F19) | final-use shares (fgo) (G30) |
| trade costs (F19) | value-added over gross output ratios (v ago) (O40) |
| upstreamness (u) (L90) | downstreamness (d) (C69) |
| service sector importance (L80) | final-use shares (fgo) (G30) |
| service sector importance (L80) | value-added over gross output ratios (v ago) (O40) |
| service sector importance (L80) | upstreamness (u) (L90) |
| service sector importance (L80) | downstreamness (d) (C69) |
| trade costs (F19) | correlations among GVC measures (C10) |