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Measuring Bilateral Exports of Value Added: A Unified Framework

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  • Bart Los
  • Marcel P. Timmer

Abstract

We provide a unified framework for measuring bilateral exports of value added. We outline a general methodology that encompasses the measures introduced by Johnson and Noguera (2012) (value added consumed abroad) and Los et al. (2016) (value added in exports), to which we refer as VAX-C and VAX-D, respectively. In addition we suggest a novel third measure, VAX-P, which indicates the value added used abroad in the final stage of production. We show that they can all be derived with the method of hypothetical extraction in a general input-output model. This is helpful in comparing and contrasting their characteristics. As a corollary, we show that for VAX-C and VAX-P the sum of bilateral measures is equal to the corresponding aggregate measure, but that this is generally not true for VAX-D. We illustrate all measures with empirical examples computed on the basis of the World Input-Output Database. These indicators can found at www.wiod.org.

Suggested Citation

  • Bart Los & Marcel P. Timmer, 2019. "Measuring Bilateral Exports of Value Added: A Unified Framework," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2019-03, Economic Statistics Centre of Excellence (ESCoE).
    • Handle: RePEc:nsr:escoed:escoe-dp-2019-03
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    More about this item

    Keywords

    Trade; Global Value Chains; Hypothetical extractions; Input-Output model;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F6 - International Economics - - Economic Impacts of Globalization

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