Working Paper: NBER ID: w16426
Authors: Robert Koopman; William Powers; Zhi Wang; Shangjin Wei
Abstract: This paper provides both a conceptual framework for decomposing a country's gross exports into value-added components by source and a new bilateral database on value-added trade. Our parsimonious framework integrates all previous measures of vertical specialization and value-added trade in the literature. To illustrate the potential of the decomposition, we present a number of applications including re-computing revealed comparative advantages and constructing an index to describe whether a country-sector is likely in the upstream or downstream of global production chains.
Keywords: Value Added; Global Production Chains; Trade Statistics
JEL Codes: F1; F2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Traditional trade statistics (F14) | Inadequate reflection of actual value added by country (F29) |
| New framework (Y20) | Complete decomposition of gross exports into value-added components (F10) |
| New framework (Y20) | Better illustration of discrepancies in global value chains (F12) |
| Decomposition of gross exports (F10) | Altered understanding of revealed comparative advantages (F12) |
| Framework (Y20) | Construction of a quantitative index (C43) |
| Framework (Y20) | Reshaping understanding of trade imbalances (F41) |