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Investigating double counting terms in the value-added decomposition of gross exports

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  • Miroudot, Sébastien
  • Ye, Ming

Abstract

Several papers using intercountry input-output tables have developed frameworks to decompose value added in gross exports and to remove potential double-counting in intermediate inputs. But these papers rely on different definitions for the domestic value added, foreign value added and double-counting terms, depending in particular on the perspective from which gross exports are decomposed (world level, country level or bilateral level). At this stage, it is very difficult for any user of value-added trade statistics to know what is calculated and which type of decomposition should be used. In this paper, we provide a general framework that relies on extraction matrices to unambiguously and consistently define domestic and foreign value-added terms in the world, country and bilateral perspective. This framework allows us to classify existing decompositions based on the perspective taken and their definition of double-counting. We also indicate the most relevant decompositions for different types of trade analysis.

Suggested Citation

  • Miroudot, Sébastien & Ye, Ming, 2019. "Investigating double counting terms in the value-added decomposition of gross exports," MPRA Paper 98232, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:98232
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    References listed on IDEAS

    as
    1. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2014. "Tracing Value-Added and Double Counting in Gross Exports," American Economic Review, American Economic Association, vol. 104(2), pages 459-494, February.
    2. Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2011. "Who produces for whom in the world economy?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 44(4), pages 1403-1437, November.
    3. Miroudot, Sébastien & Ye, Ming, 2017. "Decomposition of Value-Added in Gross Exports:Unresolved Issues and Possible Solutions," MPRA Paper 83273, University Library of Munich, Germany.
    4. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    5. Arne J. Nagengast & Robert Stehrer, 2016. "Accounting for the Differences Between Gross and Value Added Trade Balances," The World Economy, Wiley Blackwell, vol. 39(9), pages 1276-1306, September.
    6. Borin, Alessandro & Mancini, Michele, 2017. "Follow the Value Added: Tracking Bilateral Relations in Global Value Chains," MPRA Paper 82692, University Library of Munich, Germany.
    7. Foster-McGregor, Neil & Stehrer, Robert, 2013. "Value added content of trade: A comprehensive approach," Economics Letters, Elsevier, vol. 120(2), pages 354-357.
    8. Johnson, Robert C. & Noguera, Guillermo, 2012. "Accounting for intermediates: Production sharing and trade in value added," Journal of International Economics, Elsevier, vol. 86(2), pages 224-236.
    9. Bart Los & Marcel P. Timmer & Gaaitzen J. de Vries, 2016. "Tracing Value-Added and Double Counting in Gross Exports: Comment," American Economic Review, American Economic Association, vol. 106(7), pages 1958-1966, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Trade accounting; input-output table; Value-added decomposition; Global value chains; double counting;
    All these keywords.

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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