Working Paper: NBER ID: w23261
Authors: Zhi Wang; Shangjin Wei; Xinding Yu; Kunfu Zhu
Abstract: We develop a new set of country-sector level indicators of Global Value Chains (GVCs) characteristics in terms of average production length, and relative “upstreamness” on a production network, which we argue are better than the existing ones in the literature. We distinguish production activities into four types: those whose value added is both generated and absorbed within the country, those whose value-added crosses borders only once for consumption, those whose value added crosses borders only once for production, and those whose value added crosses borders more than once. Based on such an accounting framework, we further decompose total production length into different segments. Using these measures, we characterize cross-country production sharing patterns and their evolution for 56 sectors and 44 countries over 2000-2014. While the production chain has become longer for the world as a whole, there are interesting variations across countries and sectors.
Keywords: global value chains; production length; upstreamness; international trade
JEL Codes: F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| average production length of GVCs (F12) | measure of production process complexity (L23) |
| GVC participation intensity (E20) | strength of economic shocks (F69) |
| GVC engagement (D26) | vulnerability to external shocks (F41) |
| length of international portion of GVCs (F29) | economic shock experienced (F69) |