Articlebronze2017

A Portrait of Trade in Value-Added over Four Decades

306 citations0/0 files storedThe Review of Economics and Statistics

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Global trade and economics Global Trade and Competitiveness Global trade, sustainability, and social impact

Abstract

We combine data on trade, production, and input use to document changes in the value-added content of trade between 1970 and 2009. The ratio of value-added to gross exports fell by roughly 10 percentage points worldwide. The ratio declined 20 percentage points in manufacturing, but rose in nonmanufacturing sectors. Declines also differ across countries and trade partners: they are larger for fast-growing countries, for nearby trade partners, and among partners that adopt regional trade agreements. Using a multisector structural gravity model with input-output linkages, we show that changes in trade frictions play a dominant role in explaining all these facts.

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References

2003Gravity with Gravitas: A Solution to the Border Puzzle 2001The nature and growth of vertical specialization in world trade 2006Do free trade agreements actually increase members' international trade?2004Trade Costs 2006Globalization and the Gains From Variety 2008Trading Tasks: A Simple Theory of Offshoring 1998Integration of Trade and Disintegration of Production in the Global Economy 2012Tracing Value-Added and Double Counting in Gross Exports

Cited by

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