Working Paper: CEPR ID: DP8839
Authors: Pol Antràs; Davin Chor; Thibault Fally; Russell Hillberry
Abstract: We propose two distinct approaches to the measurement of industry upstreamness (or average distance from final use) and show that they yield an equivalent measure. Furthermore, we provide two additional interpretations of this measure, one of them related to the concept of forward linkages in Input-Output analysis. On the empirical side, we construct this measure for 426 industries using the 2002 US Input-Output Tables. We also verify the stability of upstreamness across countries in the OECD STAN database, albeit with a more aggregated industry classification. Finally, we present an application that explores the determinants of the average upstreamness of exports at the country level using trade flows for 2002.
Keywords: input-output tables; international trade; production line position; upstreamness
JEL Codes: F10; F14; L16; L23; O14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Stronger institutions related to the rule of law (O17) | Propensity to export in downstream industries (F14) |
| Rule of law index (K00) | Export upstreamness (F29) |
| Financial development (O16) | Propensity to export in downstream industries (F14) |
| Higher physical capital per worker (D29) | Engagement in upstream industries (L69) |
| Human capital (years of schooling) (J24) | More downstream exports (F14) |