Working Paper: NBER ID: w23222
Authors: Zhi Wang; Shangjin Wei; Xinding Yu; Kunfu Zhu
Abstract: This paper makes two methodological contributions. First, it proposes a framework to decompose total production activities at the country, sector, or country-sector level, to different types, depending on whether they are for pure domestic demand, traditional international trade, simple GVC activities, and complex GVC activities. Second, it proposes a pair of GVC participation indices that improves upon the measures in the existing literature. We apply this decomposition framework to a Global Input-Output Database (WIOD) that cover 44 countries and 56 industries from 2000 to2014 to uncover evolving compositions of different production activities. We also show that complex GVC activities co-move with global GDP growth more strongly than other types of production activities.
Keywords: Global Value Chains; GVC Participation Indices; International Trade
JEL Codes: F10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| complex GVC activities (F12) | global GDP growth (F62) |
| simple GVC activities (F12) | global GDP growth (F62) |
| higher shares of pure domestic production activities (E20) | global GDP growth (F62) |