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Mapping Vertical Trade

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Abstract

The paper develops a method to map global networks of production sharing and processing trade. Relying on highly detailed bilateral trade data across a matrix of 75 countries, a network index gauges countries’ interdependence according to the extent of trade in parts and components for further processing and assembly of final export goods. The set of bilateral network relations is then subjected to an algorithm that lays it out for visualization as a world map of vertical trade networks. Maps are drawn in relation to processing trade across all industries, as well as for the electric/electronics and automotive industries, where such trade is most prominent. The analysis identifies three major hubs in the global networks: the People’s Republic of China in connection with Japan, Germany, and the United States. Apart from Mexico (mainly because of its maquiladoras network ties to the United States) the analysis highlights that outside Asia, developing countries are not yet involved in global production networks to any significant degree.

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  • Ferrarini, Benno, 2011. "Mapping Vertical Trade," ADB Economics Working Paper Series 263, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0263
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    File URL: https://www.adb.org/publications/mapping-vertical-trade
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    Cited by:

    1. Zhu, Zhen & Morrison, Greg & Puliga, Michelangelo & Chessa, Alessandro & Riccaboni, Massimo, 2018. "The similarity of global value chains: A network-based measure," Network Science, Cambridge University Press, vol. 6(4), pages 607-632, December.
    2. Benno Ferrarini & Pasquale Scaramozzino, 2013. "Complexity, Specialization and Growth," CEIS Research Paper 275, Tor Vergata University, CEIS, revised 30 Apr 2013.
    3. Richard Pomfret & Richard Pomfret, 2014. "Expanding the Division of Labour: Trade Costs and Supply Chains in the Global Economy," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 54(3), pages 220-241, November.
    4. Enrique Martínez-Galán & Maria Paula Fontoura, 2016. "GGlobal Value Chains assessment in the 2000s: an approach with income transfers," Working Papers Department of Economics 2016/15, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    5. Sirimal Abeyratne, 2013. "Integration of Sri Lanka into Indian Supply Chains under the Bilateral Free Trade Agreement," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 14(2), pages 275-292, September.
    6. Olga Alexandrovna Klochko & Anastasia Sergeevna Tsareva, 2020. "Global Value Chains in Electronics: Regional Post-2008 Crisis Regional Changes," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 3, pages 52-75.
    7. Silvia Sopranzetti, 2018. "The Italian Districts in the Global Value Chains," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(3), pages 497-522, November.

    More about this item

    Keywords

    Processing Trade; Network Analysis; Production Sharing; Factory Asia;
    All these keywords.

    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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