Working Paper: CEPR ID: DP9245
Authors: Robert Koopman; Zhi Wang; Shangjin Wei
Abstract: This paper proposes a framework for gross exports accounting that breaks up a country?s gross exports into various value-added components by source and additional double counted terms. By identifying which parts of the official trade data are double counted and the sources of the double counting, it bridges official trade (in gross value terms) and national accounts statistics (in value added terms). Our parsimonious framework integrates all previous measures of vertical specialization and value-added trade in the literature into a unified framework. To illustrate the potential of such a method, we present a number of applications including re-computing revealed comparative advantages and the magnifying impact of multi-stage production on trade costs.
Keywords: Global Production Chains; Value Added; Exports; Vertical Specialization
JEL Codes: F10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Traditional trade statistics double count the value of intermediate goods that cross borders multiple times (F14) | Overestimation of a country's contribution to gross exports (F14) |
| The framework can decompose gross exports into distinct components, including domestic value-added exports and various double-counted components (F10) | Clarity on how much value is truly added by each country in the production process (F29) |
| Understanding the composition of double-counted terms (Y20) | Gauge a country's participation in global production chains (F69) |