Neil Foster, Robert Stehrer, Marcel Timmer, Gaaitzen de Vries WIOD - - PowerPoint PPT Presentation

▶

Aug 26, 2023 128 likes •253 views

Neil Foster, Robert Stehrer, Marcel Timmer, Gaaitzen de Vries WIOD conference, 24-26 april 2012 Groningen Local and global value chains (1 st & 2 nd unbundling) From made in [country] to: Made in the World Trade statistics are

SLIDE 1

Neil Foster, Robert Stehrer, Marcel Timmer, Gaaitzen de Vries WIOD conference, 24-26 april 2012 Groningen

SLIDE 2

 Local and global value chains (1st & 2nd

unbundling)

From made in [country]

to: Made in the World

 Trade statistics are revealing

Growth in trade versus growth in GDP
Most trade is in intermediates nowadays

 Theory

Trade in Activities (Feenstra and Hanson, 1996;

Grossman and Rossi-Hansberg, 2008)

 Why?

Information and Communication Technology
Declining trade barriers, regional agreements
Opening up of China and India

SLIDE 3

 Measures global production sharing:

Over time, from 1995-2009
Viz. GTAP, relevant improvements in the WIODatabase

for measuring vertical specialization

Extends production sharing measures to distinguish

production factors

 Finds:

Increasing vertical specialization

 Trend is robust to a host of controls, such as regional trade agreements and levels of economic development

Regional shifts in foreign earnings
Positive relation between GDP per capita and skill

content contribution in value chains

SLIDE 4

 International production fragmentation requires new

measures of international trade (WTO, OECD, DGTrade)

 Analysis based on gross export and gross import data

leads to controversial conclusions (e.g. Rodrik, 2006 vs Krugman, 2008)

 Recently, trade economists have started to measure the

export of value added (e.g. Trefler and Zhu, 2010; Johnson and Noguera, 2012; Bems et al., 2011)

Definit

initio ion: the amount of value added produced in a given source country that is ultimately embodied in final goods absorbed abroad

SLIDE 5

 Define number of countries C, industries S and

Factors F

 A = Intermediate input coefficients (CSxCS)  Total inputs required per unit of final demand is

given by L = (I-A) -1

 Where L is the Leontief inverse, which is a matrix

indicating the output used both directly and indirectly to produce final goods

SLIDE 6

 To measure the output contribution of countries

in international production sharing (Johnson and Noguera, 2012): va_ va_ex exp = diag(r) r) (I –A)-1 cj where r is the ratio of value added to output for each sector in each country, and cj is the vector of final demand for country j

 Extension to production factors from shares in

value added

SLIDE 7

 Time series analysis based on national

accounts data

 Intermediate use is broken down into

domestic and foreign origin using detailed trade statistics

 A standardised database of bilateral services

flows

 Socio-economic accounts for large

developing countries, such as China and India

SLIDE 8

0.05

0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 European Union 27 United States Rest of the World Japan China Germany France United Kingdom Italy Spain Russia Brazil Canada India Mexico Australia South Korea Netherlands Turkey Indonesia Poland Belgium Sweden Taiwan Austria Greece Denmark Finland Ireland Portugal 1995 value added export to GDP ratio change from 1995 to 2008

SLIDE 9

30 3 14 29 12 12 32 1 21 33 4 9 28 5 7 22 7 31 36 4 13 23 2 22 21 2 11 20 10 36 22 1 23 25 5 23 21 2 8 8 12 49 24 1 16 2 9 48 16 2 18 19 10 35 18 1 28 7 6 39 54 3 5 3 9 26 59 4 7 1 10 19 10 6 16 9 12 47 6 12 23 3 12 44 6 18 10 14 52 13 25 3 13 47

20 40 60 80 100 Percentage

8. Rest
7. BRIIMT
6. China
5. US
4. East As
3. EU12
2. EU15
1. EU27

2008 1995 2008 1995 2008 1995 2008 1995 2008 1995 2008 1995 2008 1995 2008 1995

EU15 EU12 East Asia US China BRIIMT Rest

SLIDE 10

.1 .2 .3 .4 Low-skilled VAX 10000 20000 30000 GDP per capita .05 .1 .15 .2 High-skilled VAX 10000 20000 30000 GDP per capita

SLIDE 11

SLIDE 12