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Trade in Value Added and the Valued Added in Trade
Abstract
This paper discussed two measures of value added flows between countries ‘Trade in value added’ accounts for value added of one country directly and indirectly embodied in final consumption of another country. ‘Value added in trade’ measures the value added embodied in gross trade flows. The paper shows that both measures result in the same overall net trade of a country which equals its trade balance in gross terms which however does not hold for bilateral relations. These value added flows can further be broken down by various production factors including capital and labour income by educational attainment categories. Using the recently compiled World Input-Output Database (WIOD) selected results comparing the EU-27, the USA, Japan and China based on both concepts regarding value added flows across countries are presented. For example, the US trade deficit with China is reduced by about 25% but would increase with respect to the EU-27 by about 20%. These imbalances are further broken down by factor incomes.
... where X r i -total gross output of sector i and country r; z domestic i -value of flows of products produced by sector i in country r and used domestically; By analogy, the input-output model for one economy can be applied to the world economy consisting of c countries whose economies consist of n sectors [28]. The basic balance equation of the global input-output table will be: ...
... Matrix A = a rs ij r,s=1,...,c i,j=1,...,n contains the coefficients of the direct material intensity of production denoting the value of products (goods and services) originating from the i-th industry in country r and used by the j-th industry in country s to produce a unit of the value of the gross output in the j-th industry in country s [28,29]. When Equation (1) is transformed using the identity matrix I, an equation called the Leontief model is obtained, as follows: ...
... Using the L matrix, a number of other coefficients describing production in the global economy can be calculated. To decompose gross exports according to the sources of value added, the value added flow matrix T was used, the general form of which for the world economy consisting of c countries and n sectors can be expressed as follows [28]: ...
The war in Ukraine and the COVID-19 pandemic have shown that Ukraine is strongly integrated with global agricultural markets, is of great importance for the world’s food security, and can effectively compete with Poland in exporting to EU markets. Contrary to Poland, the agri-food sector in Ukraine has not yet been the subject of research using input–output tables. The input–output model has many advantages in studying the structures of individual sectors and their connections with other sectors of the economy and with foreign countries. Therefore, the current study fills the existing research gap. The aim of the article is a comparative analysis of the agri-food sectors in Ukraine and Poland in 2020 (during the COVID-19 pandemic) using the input–output model. The data source is the OECD TiVA database. The main conclusion is that Poland is further along the path of agricultural and food sector development than Ukraine. The study also reveals that in terms of value, the agri-food sector in Ukraine is significantly smaller than in Poland, but it is more important in the Ukrainian economy, with agriculture being its dominant link, while in Poland it is the food industry. The Polish agri-food sector is characterized by a higher import dependency of gross output. Exports play a significant role in the distribution of the gross output of Ukraine’s agriculture and Poland’s food industry. However, the export directions differed significantly. Poland exported mainly to the EU, while Ukraine exported to Asian and Middle Eastern countries.
... Stehrer [17] indicated that the concepts of trade in value added and value-added-in trade are different. The former focuses on value-added-in trade, while the latter focuses on the distribution of benefits in gross trade. ...
... Thus far, there are relatively mature calculation methods for gross trade, value-added trade and value-added-in trade and some scholars studied the differences between trade in value added and value-added-in trade. Stehrer [17] empirically found that trade in value added and value-added-in trade are equal when calculating overall net trade of a country; however, this is not the case in bilateral trade. ...
... In this study, the pollutant emission data and multi-regional input-output tables are from the World Input-Output (WIOD) database [17,40]. The database currently has two versions, 2013 and 2016. ...
The main focuses of the Sino–US trade dispute are the issue of trade interests. If taking environmental costs into consideration, the trade interests are even more overestimated. There are different methods for measuring trade interests, and the results obtained under different methods differ. This paper uses the gross trade, value-added trade and value-added-in trade framework to calculate the economic gains and correspondent embodied pollution in China–US trade, compares the differences in results under different models and makes possible explanations. Our conclusions are as follows: (1) Traditional gross trade statistics have overestimated China’s economic benefits. The trade balance in gross trade was overestimated by 35% and 40% compared to the value-added trade and value-added-in trade. (2) China was a net exporter of embodied pollution and paid huge environmental costs from 1995 to 2011. (3) China’s exports are environmentally worse than the United States, and the calculation of pollution terms of trade proves that China paid a greater environmental cost for the same amount of economic benefits. (4) Different accounting frameworks have a great impact on the embodied pollution results at the industry level. Pollution based on value-added trade was more concentrated. The major polluting industries also changed.
... (1) Calculate the value-added trade of China's regions. Previous literature studies often used the traditional gross trade accounting method to measure the scale of China's interregional trade, and then produced two new measurement methods of value-added trade and trade value-added [1][2]. However, most of the literature did not clearly distinguish the concept and accounting method of the two, and paid less attention to the value-added generated by China's domestic trade cycle. ...
... For the calculation of value-added trade, this paper establishes a statistical model based on the ideas commonly used in the literature [1][2]12]. The accounting standard of value-added trade is based on whether the domestic valueadded of domestic production is absorbed by other countries. ...
The statistical accounting of international trade is often based on the gross value method of customs data. With the maturity of the global value chain, the international division of labor is becoming more specialized, and the trade of intermediate products is becoming more frequent. The gap between the statistical results of the traditional gross value trade accounting method and the real trade situation is widening. This paper uses the value-added trade statistical model and China's interregional input-output data to calculate the value-added trade volume of China's eight regions in 2002, 2007 and 2010, compares it with traditional statistical methods, and establishes an empirical model with value-added trade as the explanatory variable. The study found that the gross trade statistics method would distort the trade volume and exaggerate the degree of trade imbalance; Trade scale, R&D investment, fixed asset investment, employment scale and other factors will significantly affect the scale of value-added trade.
... VAE can accurately measure the export scale across divisions in the global production, effectively avoiding the false appearances caused by traditional trade statistics (Johnson and Noguera, 2017). Stehrer (2012) delineates the difference between trade in value added (TiVA) and value added in trade (VAiT), defining TiVA as the direct and indirect value added of a country driven by foreign final demand and VAiT as the value added in total trade flows between countries. Based on TiVA accounting, China's VAE accounted for only 63.6% of total exports in 2004; that is, 36.4% was double-counted in exports (Koopman et al., 2014). ...
... The MRIO model can systematically analyze the factor flows and environmental impacts of goods and services in interregional trade, and explore the sources and destinations of these flows at the regional and industrial levels. It is widely used in CO 2 emissions transfer and valueadded research (Kanemoto et al., 2011;Lenzen et al., 2013;Peters et al., 2011a;Peters and Hertwich, 2009;Stehrer, 2012). Assume that in the MRIO model, there are m countries (regions), and each country has n sectors. ...
With the accelerated expansion of global value chains (GVCs), China occupies an increasingly important position in the global production division system, which has important impacts for its economy and environment. Comprehensively measuring the economic benefits and emissions costs of China's participation in GVCs, and striving to achieve a mutually beneficial state of GVC upgrade and low-carbon economic development, are critical issues for China. This study applies the accounting framework of value-added trade and embodied CO2 emission trade to measure the potential CO2 emissions cost of China's value-added gains through traditional trade, simple GVC, and complex GVC from 2000 to 2014. The findings are fourfold. (1) Compared with traditional trade, GVC-related activities require higher carbon emissions costs to obtain value added, which exacerbates China's economic-environmental imbalance. (2) Electricity, Metals, and Non-metallic mineral industries are the primary sectors of embodied CO2 emissions exports, and they bear heavy emissions pressure while obtaining limited value added. (3) China's embodied CO2 trade and value-added trade with developing countries through GVCs are rising, whereas the trade with developed countries reveals a downward trend. (4) The characteristics of China's industrial paths under different trade routes vary considerably. CO2 emissions in the industrial path of GVC-related activities are more hidden, and comprehensive management must be carried out throughout the entire industrial chain from production to consumption. This study proposes policy recommendations for the coordinated development of economic and environmental relations, such as reducing the carbon intensity of key industries, strengthening trade cooperation with emerging economies, and enhancing China's position in GVCs.
... Koopman [27] constructed a unified framework for Trade in Value Added (TiVA) accounting to decompose total exports. TiVA accounts for the value added of one country that is directly and indirectly embodied in the final consumption of another country, focusing on measuring the value created in exports [28,29]. Lu [19] separated the value added in exports to measure IC based on TiVA accounting. ...
Economic growth and environmental sustainability represent two critical components of sustainable development. This study analyzed the impacts of China’s international economic circulation (IC) on value added and carbon emissions, using a global value chain accounting framework, seeking to answer how to achieve the dual goals of economic growth and carbon emissions reductions through IC routes: traditional, simple, and complex international economic circulations (TIC, SIC, CIC). The major findings are as follows: (1) The contribution of China’s IC to the domestic economy has decreased since 2008, while its contribution to foreign economies continues to increase. Exports mainly promote domestic economic growth through TIC, while imports mainly promote foreign economic growth through SIC. (2) The carbon emissions embodied in China’s IC through exports are 2.1–4.5 times higher than those in imports. The impact of SIC on the embodied carbon emissions in exports is higher than that in imports, while the impact of CIC in exports is equivalent to that in imports. (3) Although China is a net exporter of carbon emissions, through certain routes, China’s bilateral trade with countries such as Korea, Australia, Malaysia, and Russia are conducive to China’s carbon emissions reductions. These findings provide scientific evidence for the design of trade and carbon emissions mitigation policies.
... In other words, they do not take into account the country of origin of the value-added. Intermediate inputs are imported for the production of exports, meaning that bilateral gross exports may include inputs from third countries (Stehrer 2012). TiVA shows where value is added or captured in global commodity chains, including which country or industry and how (for example, through capital or labour) (Timmer et al. 2014). ...
The material prosperity of the global North relies on the appropriation of energy, material, labour, land and other resources from the global South through unequal exchange. While recent research provides empirical evidence demonstrating this general pattern, little has been done to assess how this operates in the case of specific neocolonial arrangements. Here we focus on Françafrique, the long-standing neocolonial relationship between France and its former colonies in the West African CFA zone. Using the environmentally extended multi-regional input-output model Eora, we quantify the flows of embodied energy, materials, labour, land and water between France and the CFA zone over the period 1990-2015. Our findings reveal clear patterns of unequal exchange, with France appropriating large quantities of resources from the CFA zone, particularly in terms of land, water and materials. We discuss the extent to which this appropriation is enabled by France’s control over currency and monetary policy in West Africa through the CFA system. Finally, we find that other major Eurozone economies also net-appropriate large quantities from the CFA zone, more intensely than the US and other core states outside the Eurozone do, apparently benefitting from the Françafrique arrangement.
... Pioneering publications of the papers of authors such as Stehrer [2012Stehrer [ , 2013 and Koopman et al. [2012] led to the development of studies on trade measured by value-added. They contain formulae and examples of trade measured by value-added trade in value added (TiVA) and value-added in trade (VAiT), as well as the results of empirical studies on TiVA and VAiT during the last decade of the 20th and first decade of the 21st century. ...
This paper aims to examine the changes in global value chains (GVCs) in the years 2020–2022 (times of the COVID-19 pandemic) compared to 2019 (last year before the pandemic). GVCs are illustrated by diagrams based on the statistics on international trade measured by value-added exports and imports. In this paper, the final demand approach is applied to measure international trade by value-added exports and imports and they were computed based on inter-country input-output tables delivered by the Asian Development Bank (ADB). The catchphrase “Made in the World” makes an impression, but in reality, value chains are rarely global. They are rather regional with three centers. “Factory Europe”, “Factory Asia”, and “Factory America” can easily be identified in the years 2019–2022 as there were three large regional supply hubs in GVCs: Germany, China, and the United States. When the years 2020–2022 were compared to 2019, “Factory Asia” with center in China elevated their position in GVCs at the expense of “Factory Europe” with center in Germany and “Factory America with center in the USA.”
... Input-output tables can be used for tracking value between industries and countries from the source or user perspective. This provides us with an option to track the flow of the value added from the source country/ industry through the exporting country/industry up to the country of the final demand (The Library of Economics and Liberty, 2019; Stehrer, 2012). ...
... Building instead on these more contemporary ideas about fragmented production, a large body of work studies the creation and trade in value-added of sectors and nations [7,[23][24][25][26][27]. As the creation and trade in value-added indeed both shape and are shaped by national production structures, such analyses should indeed reflect certain aspects of the properties and transformations of the internal production structures of nations, especially when also distinguishing between different types of value-added activities [17]. ...
This article proposes a network-analytical framework for the comparative study of national production structures in global production networks. Conceptualizing such structures as the linked networks of both domestic and foreign intermediate inputs, the latter constituting the characteristic feature of contemporary economic globalization, the proposed approach extracts a structural profile that captures the up- and downstream prominence of economic sectors for a particular country and year. These ‘fingerprints’ of national production structures can subsequently be compared on a pairwise basis, providing novel ways to determine and compare the structural similarities, transformations, and trajectories of national economies in the transnational production regime. Two shorter case studies exemplify the approach. The first applies clustering methods to explore spatiotemporal similarities of the production structures for 40 countries over the 1995–2011 period. Based on such similarities, an analytically useful classification into 11 structural types is proposed. The second study addresses structural transformations and trajectories during EU’s eastern enlargement, finding significant structural change, yet minuscule East-West convergence.
... Результирующая матрица показывает, за счет добавленной стоимости каких стран и видов деятельности удовлетворяется конечный спрос каждой страны. При этом удаление диагональных элементов из этой матрицы позволяет получить оценки торговли по добавленной стоимости (идея торговли по добавленной стоимости была разработана в исследованиях [Johnson, Noguera, 2012;Stehrer, 2012]). ...
... And there are some research, which has achieved a preliminary decomposition of trade in value-added [13]. For example, based on the shortcomings of the traditional trade accounting system, Koopman et al. divided the export value of trade into three parts, domestic value added, circumvented value added, and foreign value added, with a total of nine indicators, and connected the decomposition method of added value trade with the traditional gross value trade accounting system effectively [14]. ...
In the last decades, economic globalisation and the progress of ICT have promoted the international division of labour and optimisation of the global value chain. Moreover, improvements in incentives such as lower tariffs and more efficient border crossings have boosted international trade. Under this background, regional and sub-regional economic cooperation organizations, such as free trade area (FTA), have been developing rapidly and attracting many academic attentions. As the fastest growing FTA in the world, CAFTA is now the largest FTA in developing countries. This study focuses on the value-added network of various industries in the trade process inside CAFTA, and tries to explore the impact of trade facilitation on the DVA trade network of CAFTA. The results show that in the trade network of CAFTA, the proportion of added value of domestic trade in total exports keeps increasing, and the returned added value (RDV) increases significantly. Singapore, Vietnam, and Thailand hold relatively high positions in the production network, while China has a relatively low position. On the other hand, China and Thailand become the main beneficiaries after the establishment of CAFTA, while Singapore and Malaysia play a lesser role in trading networks. The results also show that trade facilitation has a significant positive effect on the DVA-INTrex and RDV trade networks, indicating that trade facilitation can significantly increase the domestic indirect value added and returned value added in the trade process. Moreover, the business environment (bus) is the most important factor, with efficiency and transparency of border administration (cus), availability, and use of ICTs (ict) contributing to the improvement.
... Ujęcie skupiające się na wartości dodanej w eksporcie jest rzadziej obecne w literaturze naukowej niż ujęcie tradycyjne, głównie ze względu na duże opóźnienie w publikacji danych oraz ich mniejszą dostępność, ale ukazało się szereg prac na ten temat (m.in. Durongkaveroj, 2022;Folfas, 2016;Johnson i Noguera, 2012Koopman i in., 2014;Kuźnar, 2020;Patunru i Athukorala, 2021;Stehrer, 2012). Problematykę tę poruszają także podmioty międzynarodowe, takie jak Eurostat (2022), Bank Światowy (Mattoo i in., 2013) czy Asian Development Bank Institute (Xing, 2016). ...
Research on export based on domestic value added greatly complements the knowledge about the gross export of a given country. This measure provides not only information on trade flows, but also makes it possible to determine how much they are the result of work carried out in a given country and to what extent they depend on other links of value chains. The Trade in Value Added (TiVA) database, created by OECD and the WTO, provides such information. However, the data tend to be rarely analysed and presented in public discourse. The aim of the study presented in the paper is to show the changes in Polish export based on TiVA. In order to create a complete picture of the situation of Poland, the data covering TiVA for Poland were compared with analogous results obtained for the other Visegrad Group countries, whose economies share similar historical and geopolitical conditions: the Czech Republic, Slovakia and Hungary. The study uses data covering the period between 2004 (the year Poland joined the EU) and 2018 (the last year available in the database) and applies descriptive and statistical methods. The main hypothesis of the paper, stating that TiVA in Polish export grows relatively slower than the value of export measured in the traditional way, was verified. Additionally, a supporting hypothesis, assuming that TiVA in Polish export increases relatively slower than in the other researched countries, was also examined. The analysis shows that Poland has a significantly higher percentage of domestic value added in export and the dynamics of the changes in this factor is higher compared to the other Visegrad Group countries. Nevertheless, the growth rate of Polish gross export measured in the traditional way is higher than the export measured according to TiVA.
... Building instead on these more contemporary ideas about fragmented production, a large body of work studies the creation and trade in value-added of sectors and nations [7,[23][24][25][26][27]. As the creation and trade in value-added indeed both shape and are shaped by national production structures, such analyses should indeed reflect certain aspects of the properties and transformations of the internal production structures of nations, especially when also distinguishing between different types of value-added activities [17]. ...
This article proposes a network-analytical framework for the comparative study of national production structures in global production networks. Conceptualizing such structures as the networks of sectorial flows in nationally delineated components of multiregional input-output tables, the proposed heuristic extracts a structural profile that captures the up- and downstream prominence of economic sectors for a particular country and year. These ‘fingerprints’ of national production structures can subsequently be compared on a pairwise basis, providing novel ways to determine and compare the structural similarities, transformations, and trajectories of national economies in the global production regime.Two case studies exemplify the heuristic. The first applies clustering methods to explore spatiotemporal similarities for 40 countries over the 1995-2011 period. Based on such similarities, an analytically useful classification into 12 structural types is proposed. The second study addresses structural transformations and trajectories during EU’s eastern enlargement, finding significant structural change, yet minuscule East-West convergence.
... To address double counting problems caused by traditional trade accounting in gross value, value-added trade is widely accepted as a measure of cross-border value-added flows. Some researchers have focused on trade in value-added accounting (Hummels et al., 2001;Daudin et al., 2011;Johnson and Noguera, 2012;Stehrer, 2012;Los et al., 2016;Los and Timmer, 2018;Miroudot and Ye, 2020;Xiao et al., 2020). Koopman et al. (2010), Koopman et al. (2014) proposed the gross export decomposition method for tracing value-added (KWW method), which is a widely accepted accounting framework. ...
A comprehensive assessment of the environmental and employment impacts of international trade is essential for coordinating sustainable development between the economy, environment, and society. International trade is an important driving force for global economic growth. However, the environmental and social impacts of trade under global value chains (GVCs) have not yet been comprehensively characterized. This study aims to estimate the impacts of international trade from 2000–2014 on carbon emissions and employment using the gross export decomposition method, incorporating a counterfactual method based on the multi-region input–output model. We found that (1) at the global level, international trade has been conducive to carbon emission reductions since 2003 and played a role in increasing employment throughout the study period; however, the impacts of GVC-related trade have been mixed, generating global emissions savings, but leading to job losses. This implies that there is a trade-off between carbon emission reduction through GVC embedding and employment creation. (2) At the national level, a country’s participation in international trade benefits the environment, employment, or both. In this sense, international trade is no longer a zero-sum game; rather, it is likely to be a positive-sum game for all participants regarding environmental benefits and job creation. (3) In bilateral trade, developed and developing economies have positive and negative impacts, meaning that they should take joint actions to balance environment–employment–trade growth. These findings are useful for determining the responsibilities of different countries toward climate change and achieving sustainable development of the economy, society, and environment.
... They first defined a narrow concept of vertical specialization and proposed a quantitative index of systematic measurement, which could measure GVC (Hummels et al. 2001). Since then, the methodology has been continuously developed based on aspects of the accounting framework (Koopman et al. 2008(Koopman et al. , 2010(Koopman et al. , 2014Los et al. 2016;Los and Timmer 2018;Wang et al. 2014), as well as measurement indicators (Daudin et al. 2011;Dietzenbacher et al. 2005;Johnson and Noguera 2012;Stehrer 2012;Wang et al. 2017). Wang et al. compared the trade-in value-added accounting method with the gross value accounting system from gross exports and decomposed total exports into 16 value-added components and double-counting items, thus realizing the complete decomposition of gross exports . ...
A new route perspective measure based on the global value chain (GVC) distinguishes the embodied emission transfer destinations while concurrently considering the transfer process and GVC embedding position. This study applies this measure to reassess the characteristics of China’s foreign trade embodied emissions and their impacts on global emissions. The results show that: (1) China’s domestic embodied emission exports are mainly concentrated in manufacturing and dominated by final goods exports and simple GVC routes. China primarily imports foreign emissions via simple GVC routes. (2) The embodied emission intensity of China’s exports is much higher than that of its imports, and China’s expansion in imports indirectly promoted global emission reduction. (3) China’s foreign trade increases global emissions with a waning trend, while GVC-related trade reduces global emissions. Additionally, it is feasible to reduce global emissions by adjusting China’s bilateral trade structures with different countries. We conclude that China’s GVC-related trade has increased, but exports through complex GVC tend to be the resource-input type. We emphasize that China needs to actively participate in globalization and upgrade its GVC to step off the low-end locking predicament in global production and cope with the multiple pressures of global and domestic emission reduction and stable development.
... Problem pomiaru udziału w GVC jest przedmiotem licznych dyskusji i rozważań (Stehrer 2012(Stehrer , 2013Mierzenie wartości… 2013;Baldwin, Lopez Gonzales 2015;Aslam, Novta, Rodrigues-Bastos 2017), jednak w literaturze przedmiotu powszechnie wykorzystywany jest wskaźnik pionowej specjalizacji zaproponowany przez Koopmana i innych (2011). Udział w łańcuchu wartości jest definiowany poprzez pochodzenie wartości dodanej zawartej w eksporcie w ujęciu wstecz (backward) i w przód (forward) dla kraju referencyjnego. ...
Celem badania jest ustalenie, w jakim stopniu branża B+R w Polsce uczestniczy w globalnych łańcuchach wartości, oraz określenie miejsca tej branży w tych łańcuchach. Narzędziem badawczym jest wskaźnik udziału w globalnych łańcuchach wartości, będący sumą udziałów w tych łańcuchach w charakterze odbiorcy komponentów (półproduktów) zagranicznych wykorzystywanych w produkcji w kraju („udział wstecz”) oraz udziału w charakterze dostawcy (producenta) półproduktów do wytwarzania za granicą wyrobów finalnych („udział do przodu”). Analiza obejmuje najbardziej aktualne dostępne dane, pochodzące z baz danych EORA (2015 r.) oraz WIOD (2014 r.). Wykazano, że branża usług B+R w Polsce uczestniczy, ale wciąż w niewielkim zakresie, w globalnych łańcuchach wartości. W porównaniu do całej gospodarki polskiej, gdzie około połowa eksportu odbywa się w ramach globalnych łańcuchów wartości, w branży B+R udział ten jest około dwukrotnie niższy. Widoczna jest ponadto odmienna tendencja w kształtowaniu się kierunków tego udziału: dla całej gospodarki polskiej wyraźnie przeważa udział w charakterze odbiorcy komponentów zagranicznych do produkcji krajowej (udział wstecz), natomiast w przypadku branży B+R obydwa wskaźniki cząstkowe mają zbliżone wartości, a obliczenia na podstawie EORA wskazują nawet na przewagę udziału do przodu.
... Stehrer (2012) distinguished carefully between value added in trade and trade in value added (also called value added trade). "Value added in trade" calculates the value added contained in gross trade fl ows between two countries, while "trade in value added" accounts for the value added of one country directly and indirectly contained in the fi nal consumption of another country. ...
By applying stochastic frontier analysis, and replacing total export with value added in exports as a more accurate measure of domestic content embodied in exports, we estimate the trade efficiency between China and EU countries and analyze the determinant factors. The results show that the value added in trade between China and EU countries is running at a low level of efficiency, and the trade efficiency has an obvious imbalance between export and import. Our calculation of unexplored trade potential indicates that western EU countries, such as France, Germany, Italy, and Spain together are China's top trading partner with the highest unexploited trade potential. Based on the principal component analysis of 14 trading‐related variables, trade efficiency determinant results show that the tangible trade infrastructures of both exporter and importer matters most, including airports, container shipping, Internet, and broadband infrastructures. Meanwhile, intangible trade infrastructures, including customs procedures and domestic business environments, has a significant, but smaller influence on trade efficiency. Our important findings shed light on practical trade policymaking to encourage Sino‐EU trade collaboration.
... where x tijW is the annual bilateral value-added exports (see e.g. Stehrer, 2012) of industry W from country i to country j in year t , taken from the WIOD, which also includes intra-country ( i = j ) trade; n,tjiW is the indicator of the first channel of trade policy of type n ∈ {T, SPS, TBT} imposed by country j on imports of sector W from country i in year t ; n,tijW is the indicator of the second channel of trade policy of type n faced by exports from country j to country i in sector W in year t ; n,tijW,GVC is the indicator of the third channel of trade policy that is calculated through Eq. (16)-that is, the trade policy of type n accumulated across the previous stages of production of inputs of production from country j to country i in sector W (17) ...
Globalisation is increasingly characterised by intertwined geographical and local production processes through global value chains (GVCs). In the presence of GVCs, import tariffs not only affect the direct trading partners, but also result in indirect impacts through inter-country and inter-industry linkages. This is also the case for non-tariff measures (NTMs), which have gained in significance in recent decades and are an important part of comprehensive trade negotiations and agreements. This paper analyses the effects of such trade policy instruments along GVCs. The authors estimate bilateral ad-valorem equivalents (AVEs) of two types of NTMs (technical barriers to trade, and sanitary and phytosanitary measures) and calculate cumulative bilateral trade restrictiveness indices based on these AVEs and tariffs by taking GVC linkages into account. This produces a ‘trade restrictiveness index’. Using this index, the authors investigate the impacts of these trade policy measures by applying a structural gravity model on value added and gross exports. The results indicate that tariffs have a stronger impact on exports than do NTMs, though tariffs have been reduced significantly in the past decades. As for the impact of NTMs, the results confirm the existing literature that suggests there can be both trade-enhancing and trade-hampering effects.
... Then, the adjacency matrix of the global value-added network (GVAN) G is calculated aŝ CLD, whereD is a diagonal matrix whose diagonal components are the vector D. This opera-tionĈLD calculates the value called trade in value-added (TiVA) [32]. Eliminating components of 43 on-diagonal 56 × 56 blocks (which mean domestic components) as zero from G, we obtained the IVAN's adjacency matrix Y. ...
Global value chains are formed through value-added trade, and some regions promote economic integration by concluding regional trade agreements to promote these chains. However, it has not been established to quantitatively assess the scope and extent of economic integration involving various sectors in multiple countries. In this study, we used the World Input–Output Database to create a cross-border sector-wise network of trade in value-added (international value-added network) covering the period of 2000–2014 and evaluated them using network science methods. By applying Infomap to the international value-added network, we confirmed two regional communities: Europe and the Pacific Rim. We applied Helmholtz–Hodge decomposition to the value-added flows within the region into potential and circular flows, and clarified the annual evolution of the potential and circular relationships between countries and sectors. The circular flow component of the decomposition was used to define an economic integration index. Findings confirmed that the degree of economic integration in Europe declined sharply after the economic crisis in 2009 to a level lower than that in the Pacific Rim. The European economic integration index recovered in 2011 but again fell below that of the Pacific Rim in 2013. Moreover, sectoral economic integration indices suggest what Europe depends on Russia in natural resources makes the European economic integration index unstable. On the other hand, the indices of the Pacific Rim suggest the steady economic integration index of the Pacific Rim captures the stable global value chains from natural resources to construction and manufactures of motor vehicles and high-tech products.
... With reference to previous research (Stehrer 2012), and by using one country as an example, country r's value-added Environ Sci Pollut Res exports VAX r and imports VAX m can be expressed as Eq. 3 and Eq. 4. V r is the n×1 vector, indicating value added caused by per unit of output at the sector level in country r. When calculating one country's value-added export, other countries' value-added rate row vectors are all set as zero. ...
We use input-output analysis and Levinson’s structural decomposition method to measure China’s CO2 emissions under the no-trade hypothesis, to calculate how international trade affects China’s emissions. We also analyze the driving factors of the difference between hypothetical no-trade CO2 emissions and actual emissions and discuss the existence of “Pollution Haven Hypothesis” (PHH) in China. The results show that (1) from 2000 to 2017, the hypothetical no-trade CO2 emissions are 2.43–14.67% lower than actual emissions. The scale effect is the main cause of this difference, while the composition effect fluctuates and has little impact. (2) Although exports make other economies’ CO2 emissions transfer to China, imports also help avoid China’s emissions from some carbon-intensive sectors. (3) International trade has little impact on the cleanliness of China’s industry composition. The no-trade industry composition is slightly cleaner than the actual one before 2010, after which trade improves the cleanliness of industry composition to a small extent. PHH is invalid for China in recent years, and results for most developing countries do not support PHH. (4) The relationship between no-trade effects and income per capita for all the economies does not also support PHH. Most economies reduce emissions, and their industry compositions are cleaner because of trade, regardless of their development degree. Trade will not severely influence China’s future emission reduction, and improving the cleanliness of carbon-intensive sectors should be paid more attention to.
... With reference to previous research (Stehrer 2012), and by using one country as an example, 148 country r's value-added exports VAX r and imports VAX m can be expressed as equations (3) and (4). ...
We use input–output analysis and Levinson’s structural decomposition method to measure China’s CO 2 emissions under the no-trade hypothesis, to calculate how international trade affects China’s emissions. We also analyze the driving factors of the difference between hypothetical no-trade CO 2 emissions and actual emissions and discuss the existence of “pollution haven hypothesis” (PHH) in China. The results show that (1) from 2000 to 2017, the hypothetical no-trade CO 2 emissions are 2.43–14.67% lower than actual emissions. The scale effect is the main cause of this difference, while the composition effect fluctuates and has little impact. (2) Although exports make other economies’ CO 2 emissions transfer to China, imports also help avoid China’s emissions from some carbon-intensive sectors. (3) International trade has little impact on the cleanliness of China’s industry composition. The no-trade industry composition is slightly cleaner than the actual one before 2010, after which trade improves the cleanliness of industry composition to a small extent. PHH is invalid for China in recent years, and results for most developing countries do not support PHH. (4) The relationship between no-trade effects and income per capita for all the economies does not also support PHH. Most economies reduce emissions, and their industry compositions are cleaner because of trade, regardless of their development degree.
... However, because of the restrictions on data and calculation methods, the research on vertical specialization remained at the case study level until Hummels defined a narrow concept of vertical specialization and put forward a quantitative index of systematic measurement, which made it possible to measure the global value chain (Hummels et al., 2001). Since then, the methodology has been developed continuously (Koopman et al., 2008(Koopman et al., , 2010(Koopman et al., , 2012(Koopman et al., , 2014Wang et al., 2009;Daudin et al., 2011;Johnson and Noguera, 2012;Stehrer, 2012;Timmer et al., 2014). Finally, Wang et al. compared the TiVA accounting method (with the gross value accounting system) from the perspective of gross exports and decomposed the total exports into 16 terms (consisting of 12 value added items and 4 double-counting items), thereby, realizing the complete decomposition of gross exports ; the decomposition framework of the global value chain accounting is thus complete. ...
Energy issues are closely related to the development of human society and economy. Embodied energy is the total direct and indirect energy consumption required for the production of goods and services. In the context of the intensifying development of economic globalization and prosperity of international trade, embodied energy is considered as a better indicator to comprehensively reflect the nature of a country’s energy use than the direct energy use. The development of trade in value added (TiVA) accounting and global value chain theory has brought new ideas to embodied energy research. This study applies TiVA accounting to the study of embodied energy and establishes a complete framework to decompose the sources, destinations, and transfer routes of embodied energy in a country’s exports, and comprehensively depicts the embodied energy flows in China’s exports at the country and sector levels as an instance. The results show that China exports large amounts of embodied domestic energy use, and export is an important factor for the rapid growth of China’s energy and emissions. At the country level, the United States and EU28 are traditional major importers of China, and developing countries, such as Brazil, India, and Indonesia, are emerging markets. China’s embodied energy flows to different importers vary in terms of trade patterns, flow routes, and the embodied domestic energy intensities. At the sector level, the light industry and the services create more benefits, whereas manufacturing, such as chemicals and metal products, consumes more energy, and there is a mismatch between the main sectors that create economic benefits from exports and the main sectors that consume energy for exports. These results indicate that embodied energy of China’s exports has a great impact on global energy consumption and carbon emission, and the optimizing of China’s export embodied energy structure is conducive to global energy conservation and emission reduction. This article strongly suggests the importance of the global value chain decomposition framework in embodied energy research.
... Stehrer (2013) applied the framework of Koopman et al. (2012) at the bilateral level. This endorsed for a detailed account of the relationships between the two concepts from Stehrer (2012) and the role of third countries in bilateral value-added trade. To relate these concepts to each other, Stehrer used the WIOT to discuss the role of double counting in bilateral value added trade, and aggregation issues in global value added flows to obtain the selected results on bilateral value added trade for the EU 27 countries, the United States and China over the period 1995-2011. ...
Purpose: This paper aims to analyze a disaggregated accounting structure that steadily breaks down Korea’s automobile gross exports at the sectoral, bilateral, and bilateral-sectoral levels into the sum of the various value-added and double counted items.
Design/Methodology/Approach: The Leontief decomposition method is used to measure the value-added flows between industries. This method breaks down the Korean automobile sector and analyzes how changes within the sector can affect other sectors. Wang-Wei-Zhou decomposition method builds on the Leontief insight to give a more detailed look at the structures of international production networks and the respective positions of countries and sectors within them. Our dataset is derived from the World Input-Output Database (www.wiod.org), using the 2016 release version, with 2014 as the base year. The 56 sectors are aggregated into 30 while the 43 countries into 15.
Findings: Korea’s principal export destinations include: the United States, Russia, China and Canada. The amount of value-added that the Korean Automobile sector has contributed to the exports of the Korean ship building sector is very significant when compared with that contributed to the exports of other sectors within the economy. Externally, the sector’s amount of value-added contribution to the exports of Russia’s mining sector (the world’s largest producer of diamonds and palladium) is very substantial. In terms of Korea’s bilateral exports, most of its exports to the United States are mainly in final goods while its trade with China is mostly in intermediate goods.
Research Implications: Global value chains provide opportunities for developing countries to diversify their exports and intensify their integration into the global economy.
... Stehrer (2013) applied the framework of Koopman et al. (2012) at the bilateral level. This endorsed for a detailed account of the relationships between the two concepts from Stehrer (2012) and the role of third countries in bilateral value-added trade. To relate these concepts to each other, Stehrer used the WIOT to discuss the role of double counting in bilateral value added trade, and aggregation issues in global value added flows to obtain the selected results on bilateral value added trade for the EU 27 countries, the United States and China over the period 1995-2011. ...
Purpose - This paper aims to analyze a disaggregated accounting structure that steadily breaks down Korea’s automobile gross exports at the sectoral, bilateral, and bilateral-sectoral levels into the sum of the various value-added and double counted items.
Design/Methodology/Approach - The Leontief decomposition method is used to measure the value-added flows between industries. This method breaks down the Korean automobile sector and analyzes how changes within the sector can affect other sectors. Wang-Wei-Zhu decomposition method builds on the Leontief insight to give a more detailed look at the structures of international production networks and the respective positions of countries and sectors within them. Our dataset is derived from the World Input-Output Database (www.wiod.org), using the 2016 release version, with 2014 as the base year. The 56 sectors are aggregated into 30 while the 43 countries into 15.
Findings - Korea’s principal export destinations include: the United States, Russia, China and Canada. The amount of value-added that the Korean Automobile sector has contributed to the exports of the Korean ship building sector is very significant when compared with that contributed to the exports of other sectors within the economy. Externally, the sector’s amount of value-added contribution to the exports of Russia’s mining sector (the world’s largest producer of diamonds and palladium) is very substantial. In terms of Korea’s bilateral exports, most of its exports to the United States are mainly in final goods while its trade with China is mostly in intermediate goods.
Research Implications - Global value chains provide opportunities for developing countries to diversify their exports and intensify their integration into the global economy.
... Based on the single regional input-output model (Daudin et al., 2011 [16]; Koopman et al., 2010 [17]; Hong Ma et al., 2015 [18]), the composition of global value chain of international trade can be decomposed. According to the world input-output framework (Johnson and Noguear, 2012 [5]; Stehrer, 2012 [19]; Timmer, 2014 [20]; Li Xin and Xu Dianqing, 2013 [21]), the source and final destination of export value of each industry in a country are clarified. Wang et al. (2013) [22] divided the export volume into 16 parts according to value sources and different final absorption places, and completed the total decomposition of the value added of export trade, laying a methodological foundation for the study of international competitiveness of manufacturing industry from the perspective of global value chain. ...
... TiVA, which is sometimes referred to as a nation's 'value footprint' (Wiedmann and Lenzen, 2018), accounts for the monetary value added by one country embodied in the final demand of another country, i.e. TiVA represents the monetary value a nation generates through its exports rather than the total value of the goods exported (Stehrer, 2012). The TiVA indicator is the financial counterpart to input-output-based resource footprints and follows the same calculation steps (see section 3.2). ...
Ecologically unequal exchange theory posits asymmetric net flows of biophysical resources from poorer to richer countries. To date, empirical evidence to support this theoretical notion as a systemic aspect of the global economy is largely lacking. Through environmentally-extended multi-regional input-output modelling, we provide empirical evidence for ecologically unequal exchange as a persistent feature of the global economy from 1990 to 2015. We identify the regions of origin and final consumption for four resource groups: materials, energy, land, and labor. By comparing the monetary exchange value of resources embodied in trade, we find significant international disparities in how resource provision is compensated. Value added per ton of raw material embodied in exports is 11 times higher in high-income countries than in those with the lowest income, and 28 times higher per unit of embodied labor. With the exception of embodied land for China and India, all other world regions serve as net exporters of all types of embodied resources to high-income countries across the 1990-2015 time period. On aggregate, ecologically unequal exchange allows high-income countries to simultaneously appropriate resources and to generate a monetary surplus through international trade. This has far-reaching implications for global sustainability and for the economic growth prospects of nations.
... This appendix illustrates the basic input-output methodology to calculate the VAX, including a 3-country, 2-sector example. Following the trade in value added concept in Johnson and Noguera (2012) and the expositions in Stehrer (2012), three components are required to calculate the value added exports. For any reporting country r, these components are the value added requirements per unit of gross output, v r ; the Leontief inverse of the global input-output matrix, L; and the final demand vector, f J where J indicates that the vector includes demand from every country j ∈J. ...
This paper investigates empirically the relationship between specialisation in the production of tradable output and the current account balance. According to the ‘tradability hypothesis’ that is examined, countries that specialise in highly tradable sectors tend to run current account surpluses while countries with dominant non-tradable sectors risk running current account deficits. In order to test this hypothesis empirically we develop a value-added based tradability index which captures the tradability of a country’s output. Applied to a large sample of European countries, our empirical model provides strong evidence in favour of the tradability hypothesis. The main policy implication is that the anxieties about ‘de-industrialisation’ in large parts of Europe seem justified with a view to growing external imbalances.
... Differently, AEI of trade indicates the ratio of emission and value added embodied in one country's gross trade flows. This difference quite similar with the difference between the concept of trade in value added and value added trade clarified by Stehrer (2012). ...
... Based on the WIOD database, Stehrer calculates the domestic value of the exported goods by decomposition of the source of the final commodity value of export [6], but the added value of the indirect exports through the third country is ignored, which will affect the accuracy of calculating the export in value-added. Based on the perspective of the final demand and the use of the Leontief inverse matrix, Stehrer first interpreted the concept of trade in value added into three parts in the form of matrix operation and covered trade transfer and the value added part by the third country to the destination country [7]. Many scholars began to use this final method to calculate the national and industrial level of export in value added. ...
... One example would be hardwood plywood manufactured in North Carolina but declared for export by a Georgia wholesaler out of the Port of Savannah. This follows the logic behind trade in value added, which clarified the direct and indirect value added from a source country contained in a target country's final consumption (Koopman et al. 2011, Powers 2012, Stehrer 2012. ...
North Carolina forest-sector foreign exports were quantified by applying an origin-of-production methodology that awarded the state a portion of national export value corresponding to its share of a US forest industry. A US602.989 million of value added and 6,870 jobs based upon FEC activities of US1.439 billion of value added and 16,640 jobs on sales across North Carolina of US1.000 million of FEC output and value added generated an additional US1.386 million in other industries, respectively, before leaving the state to purchase imported inputs. Each 1,000 FEC-dependent jobs supported an average of 1,420 jobs elsewhere in North Carolina’s economy. Information such as this provides policymakers an improved scope of the contributions driven by exporting to foreign markets.
... The conceptual basis for the trade flows analysis based on international input-output relationships has been laid down in a number of papers focusing on empirical measurement of the VA of trade (e.g., see Refs. [6][7][8][9][10]). Figure 11.1 shows various examples of the different transactions accounted for in both domestic (straight lines) and foreign (dotted lines) VA in EU exports. Germany may export domestically produced cars to China, thus generating VA in the EU (e.g., Germany). ...
... Under the Heckscher-Ohlin framework, the compensation for abundant factor of production should be relatively lower (Stehrer, 2012). Therefore, we expect to see that the labor abundant countries like Indonesia have smaller compensation for labor rather than compensation for capital. ...
This paper aims to study the role of foreign final demand, especially in advanced and developing economies, in generating Indonesia's value added and employment. The methodology used in the analysis follows the global value chain framework of Timmer et al. (2012a), which has been previously introduced by Johnson and Noguera (2012). Through this method we are able to calculate value added, which gives more precise picture on international trade flows than traditional measure of gross export. Additionally, we examine Indonesia's income and jobs induced by foreign final demands in a relatively longer period of 1995-2009 using the World Input-Output Table provided by the WIOD project.
In recent years, frequent global emergencies have disrupted international stability and prompted countries to decouple from Global Value Chain (GVC) . How to restore the extent of countries’ decoupling is crucial for risk prevention. From a systems science perspective, this paper constructs a GIVCN model using ADB-MRIO data and proposes a theoretical framework for quantitatively analyzing the decoupling degree of economies and industries within GVC. Taking the U.S.’s new trade remedy measures as a case study, this paper examines their impact on China and “transit” countries regarding GVC decoupling. The main findings are: (1) Industries with significant intermediate goods trade are more stable in GVC than resource-based sectors during global disruptions. (2) Highly integrated countries with advanced economies show strong resilience and effectively utilize external resources in GVC. (3) Despite the COVID-19 impact, China’s resilience strengthened its GVC connections. (4) A domestic circulation-focused model enhances China’s ability to handle trade challenges from the West. (5) Multilateral trade agreements and “backdoor” export strategies effectively bypass U.S. trade restrictions in the short term. JEL: F731
The United States, as the world's largest consumer market, is through the "Climate Act", "De-Risking", and other means, and continues to promote friend-shoring, near-shoring, and industrial chain relocation plan to China's import and export trade recovery a layer of haze. From 2020 onwards, China will gradually decline from the United States' largest trading partner to the third largest trading partner, surpassed by Mexico and Canada, and the gap in market share is increasing. In conclusion, Sino-US trade friction has profoundly changed the structure of the international division of labor and the structure of traded commodities, and how to measure the impact on the global economic system as well as the industrial status of the two countries from the perspective of complexity science has become an important issue worthy of research. This paper utilizes the Multi-Region Input-Output (MRIO) Data compiled by the Asian Development Bank (ADB) to construct the Global Production Network (GPN) aimed at restoring the transfer process of intermediate products in the Global Value Chain (GVC), and designs a dynamic network characteristic indicator based on the biased random walk process, and uses it to measure the industrial impact and demand dependence of the industrial sector on a global scale. The study shows that Sino-US trade friction can ostensibly protect the United States trade, but it actually hinders the process of globalization, and can only win a certain competitive advantage for it in the short term; in the long run, this unilateral protection behavior is not only detrimental to the integration of the global economy, but will also exacerbate the trade deficit, intensify trade friction, and weaken its own economic strength. Finally, based on the principles of "mutual respect, peaceful coexistence, and win-win cooperation", this paper puts forward policy recommendations for expanding and deepening economic and trade cooperation between the two countries.
This paper examines the evolution of manufacturing comparative advantage within the context of Global Value Chains (GVCs) and explores the amplifying role of logistics performance in this evolution. We employ a framework that transitions from the Product Space at the product level to the Industry Space at the industry level, utilising value-added exports instead of gross exports. Through empirical analysis, we confirm the inter-industry network effect (measured by industry density) on manufacturing comparative advantage along GVCs. Additionally, we investigate the logistics performance index (LPI) as a moderator, shedding light on its crucial role in the evolution mechanism. Furthermore, we identify heterogeneity among different economies in terms of the amplifying effect of LPI on the evolution pattern of manufacturing comparative advantage, which can be attributed to significant differences in industry structure between developed and developing economies operating within GVCs.
This study aims to evaluate the environmental and employment impacts of China’s value-added trade using the gross exports decomposition method and balance of avoided factor content. The major findings are that China’s value-added trade overall leads to increases in global emissions and employment, which are mainly affected by the characteristics of China’s exports. However, China’s imports indirectly promote global emissions reductions and have a significant driving effect on foreign employment. Trade through onefold value chains plays a dominant role in determining both impacts. Simple global value chain (GVC)-related trade contributes most to reducing global emissions but decreases global employment as well. Complex GVC-related trade overall increases global employment and emissions. At the bilateral level, the impacts are varied, and there are some instances of complex GVC-related bilateral trade that contribute to global emission mitigation. A win–win situation for the environment and employment can be achieved in China’s bilateral trade with some countries through specific value chain routes. These findings can provide useful information for balancing trade growth, carbon emission reduction, and job creation and may indicate the future direction of China’s upgrade in the GVCs and help allocate emission reduction responsibilities.
This paper assesses whether and how the participation to Global Value Chains (GVCs) contributes to trade imbalances. We test empirically the relationship between GVCs participation and a country’s net export for 42 countries in the period 2000-2014, using the World Input - Output Database (WIOD) on international production linkages. We find that trade balance is positively associated with countries’ involvement in GVCs, but the trade balance worsens the higher the offshoring to lower-income countries, while it improves the higher the offshoring to higher-income countries. This asymmetry suggests that when countries offshore to higher-income partners the gains in competitiveness overcome the potentially negative effect of larger imports of intermediate inputs.
This study investigates whether the world economy has been trending towards interdependence or economic nationalism. Since 2002, the world GDP has been increasing, but international trade has not increased at the same rate. Furthermore, previous studies had indicated complex global value chain production activities had declined. Our research analyzed the Global Value-Added Network (GVAN) built using World Input-Output Tables and a basic input–output model of Trade in Value-Added (TiVA) calculations. Then, we showed how global economies were interdependent either regionally or sectorally as flow-based communities. Moreover, analyzing structural changes of the communities of GVAN from 2000 to 2014, we found that characteristic changes happened in 2004 and 2011. This result illustrates changes in economic trends after the global economic crisis in 2009. In this chapter, we explain the whole study with illustrative examples.
Global value chains (GVCs) are formed through value-added trade, and some regions promote economic integration by concluding regional trade agreements to promote these chains. However, there is no way to quantitatively assess the scope and extent of economic integration involving various sectors in multiple countries. In this study, we used the World Input--Output Database to create a cross-border sector-wise trade in value-added network (international value-added network (IVAN)) covering the period of 2000--2014 and evaluated them using network science methods. By applying Infomap to the IVAN, we confirmed for the first time the existence of two regional communities: Europe and the Pacific Rim. Helmholtz--Hodge decomposition was used to decompose the value flows within the region into potential and circular flows, and the annual evolution of the potential and circular relationships between countries and sectors was clarified. The circular flow component of the decomposition was used to define an economic integration index, and findings confirmed that the degree of economic integration in Europe declined sharply after the economic crisis in 2009 to a level lower than that in the Pacific Rim. The European economic integration index recovered in 2011 but again fell below that of the Pacific Rim in 2013. Moreover, sectoral analysis showed that the economic integration index captured the effect of Russian mineral resources, free movement of labor in Europe, and international division of labor in the Pacific Rim, especially in GVCs for the manufacture of motor vehicles and high-tech products.
The economy of the R.M. did not have the necessary immunity to face the worldwide consequences of the global financial crisis that hit most of the western national economies a few years ago. In order to prevent and alleviate the negative consequences, the government of the RM during the period from 2008 to 2010 has taken some anti-crisis package of measures. The government has introduced four packages of anti-crisis measures in the period 2008-2010. The aim of this paper is to analyze how the government of the Republic of Macedonia facing with the 2008 financial crisis, how the government was implement the anti crisis measures and finely what is the impact of financial crisis in the business sector with special emphasize the Pollog region. A large scale survey in SME’s has been conducted in order to get a clearer picture from the business point of view.
The aim of research is to evaluate China’s potential trade to selected European markets covered by the Belt and Road Initiative (BRI) and Chinese value added embodied in these countries gross exports. The study tried to answer the question: is there relation between Chinese actual exports coverage of its potential exports to selected European markets and China’s value added embodied in gross exports of its trade partners in Europe. The study covered 54 industries from selected 19 European countries which are the members of Chinese BRI. The study confirmed the positive relationship between Chinese actual exports coverage and China’s value added embodied in gross exports of its selected trade partners in Europe. Moreover, the analysis allowed identifying European markets that were characterized by high export potential for China and still not adequately used both in terms of total exports and value added. The study also identified specific industries, where China was particularly exploiting its exports.
Purpose
This paper aims to explore value creation configurations pursued by suppliers in high-cost countries. The proposed value creation configuration approaches are seen as means for supplier firms to strengthen their competitiveness when faced with increasing global sourcing.
Design/methodology/approach
Survey data on supplier firms in Denmark are used in a hierarchical cluster analysis. The identified clusters are interpreted as expressions of different value creation configurations pursued by suppliers with regards to relations with their most important customers.
Findings
Three types of suppliers are identified: detached suppliers, which seek to create customer net benefits through low costs; technology-focused suppliers, which design value creation around benefits linked to being at the technological forefront; and integrated suppliers, which share characteristics with technology-focused suppliers, but also align closely with a relatively broader range of customer activities.
Research limitations/implications
Limitations include the specificity of findings from one small, open economy with an extensive supplier base.
Practical implications
For managers in supplier companies, the research suggest value configurations can be used as strategic templates for further specialization and as way to assess and address value creation potential in customer firms.
Originality/value
Previous studies tend to overlook suppliers’ developments of value-creating activities to maintain customer relationships. The paper takes a supplier perspective to deepen the empirically based understanding of value creation configurations followed by high-cost country suppliers in the context of increasing global competition and production relocation. Theoretical implications as well as lessons formanagers in supplier firms of the identification of the different approaches to value creation configurations are presented.
The aims of this paper are to estimate the revealed comparative advantage of the largest world exporters – the USA, Germany and China – in the years 2000-2014 and compare the comparative advantage index with the structure of their exports. The classical RCA and the modified RCADVA index (based on value added) were used for estimating revealed comparative advantage in foreign trade. The analysis shows that the USA had comparative advantage in the trade of agricultural products and services. Germany and China had comparative advantage in the trade of manufactured products. It was ascertained that the correlation between the share of a given good or service in total exports of the countries under study and the RCADVA index was positive. The structure of Chinese exports was the most consistent with the comparative advantage index, whereas the structure of US exports was the least consistent with this index.
Purpose
The purpose of this paper is to explore the value added of exports of services, which increasingly involve intermediate inputs to manufacturing and are indirectly embodied in intermediate and finished good exports to the global market earned by Taiwan and South Korea.
Design/methodology/approach
This paper uses the World Input-Output Database to examine and compare the competitiveness of service industry between Taiwan and South Korea in China from 1995 to 2011. The author measures the value added of export in two ways: value added in trade (VAiT) and trade in value added (TiVA).
Findings
The proportion of domestic (intermediate and final demand) VAiT was created by Taiwanese and South Korean exports to China. The services amount share of value added embodied in Taiwanese electrical and optical equipment (ELE) exports to China increased gradually (38.0–45.7 percent) from 1996 to 2011, that was more than that of South Korea (26.7–23.3 percent). Taiwanese financial and business (F&B) service contributed to Taiwanese ELE production exported to China. In service sectors, the proportion of VAiT of Taiwanese F&B service embodied in ELE exports to China increased annually (9.8–11.5 percent), that was similar to that of South Korea (12.2–11.3 percent). Thus, F&B sector played an increasingly important role in service sectors. Taiwanese F&B promotes the ELE export to China with higher efficiency than South Korea does.
Originality/value
Over the past two decades, the development of information technology and the growth of international specialization and fragmentation of production processes have brought about a global value chains (GVCs) phenomenon in services, which has already been taking place in manufacturing for a long time. Intangible value added of services increasingly involved intermediate inputs from manufacturing and were indirectly embodied in intermediate and finished goods exported to the global market. The focus of this paper is to analyze how the service industry participates in the development of the GVC, with emphasis on the export of ELE production to China in the bilateral trade of Taiwan and Korea with China. In addition to the value-added components, the exports of F&B intermediate products to China have been increasing year by year, and Taiwanese is higher than South Korean. In the bilateral trade between Taiwan or Korea and China, for ELE production exported to China, double counted part of intermediate products is increasing year by year. In terms of the value added of the double counting of F&B exports to China, Taiwan is higher (PDC, 31.23–17.26 percent) than South Korea. (PDC, 8.7–15.12 percent). South Korea and China are not as closely related as Taiwan and China.
Using the input−output approach, the article examines evolving economic growth in developed and developing countries over the last 30–40 years and the structural shifts brought about by globalization. The rationale of a possible reindustrialization scenario for developed countries is substantiated. Assessment is performed of the impact that global value-added chains exert on the development of individual countries, the relationship between the level of technological development, structural shifts, and economic growth.
This paper examines the role and possibilities of world interindustry models in scenario-analytical studies in terms of prospects of the Russian economy in global value chains. Quantitative parameters of the Russian economy in global value chains are given.
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