Clustering Value-Added Trade: Structural and Policy Dimensions

Escaith, Hubert and Gaudin, Hadrien (2014): Clustering Value-Added Trade: Structural and Policy Dimensions.

Abstract

The paper uses exploratory data analysis to propose a typology of exporters according to the value-added content of their exports as well as other economic and trade policy characteristics. In the process, it defines clusters of countries according to the multi-dimensional criteria defined by value-added, economic and trade policy indicators. Results show that natural resources and services orientation are among the most determinant variables. The level of economic development remains a crucial determinant of the Trade in Value-Added profile, more than the sheer size of the economy. Pro-active value-chain up-grading strategies foster a higher foreign content in exports, compensating the lower domestic margin by higher volumes. Protectionist policies are not particularly successful in increasing higher share of domestic content, except in services exports; but in this case, volumes remain marginal.

• Item Type: MPRA Paper
• Language: English
• Keywords: Trade in value-added; global value chains; trade policy; input-output analysis; effective protection rate; exploratory data analysis
• Subjects: D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D57 - Input-Output Tables and Analysis; F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F1 - Trade > F15 - Economic Integration; F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O19 - International Linkages to Development ; Role of International Organizations; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy

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