Decomposition of Value-Added in Gross Exports:Unresolved Issues and Possible Solutions

Miroudot, Sébastien and Ye, Ming (2017): Decomposition of Value-Added in Gross Exports:Unresolved Issues and Possible Solutions.

Abstract

To better understand trade in the context of global value chains, it is important to have a full and explicit decomposition of value-added in gross exports. While the decomposition proposed by Koopman, Wang and Wei (2014) is a first step in this direction, there are still three outstanding issues that need to be further addressed: (1) the nature of double counting in gross exports; (2) the calculation of the foreign value-added net of any double counting; and (3) the decomposition of gross exports at the industry level (the industry where exports take place). In this paper, we propose a new accounting framework that addresses these different issues and clarifies the definition of exports in inter-country input-output (ICIO) tables. It contributes to the literature: (i) by refining the definition of double-counted value-added in gross exports; (ii) by providing new expressions for the foreign value-added and double-counted terms; and (iii) by indicating how the new framework can be used to decompose exports at the industry level.

• Item Type: MPRA Paper
• Language: English
• Keywords: Trade accounting, input-output table, Value-added decomposition, Global value chains
• Subjects: E - Macroeconomics and Monetary Economics > E0 - General > E01 - Measurement and Data on National Income and Product Accounts and Wealth ; Environmental Accounts; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E16 - Social Accounting Matrix; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L14 - Transactional Relationships ; Contracts and Reputation ; Networks

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