This paper makes two methodological contributions. First, it proposes a framework to decompose total production activities at the country, sector, or country-sector level, to different types, depending on whether they are for pure domestic demand, traditional international trade, simple GVC activities, and complex GVC activities. Second, it proposes a pair of GVC participation indices that improves upon the measures in the existing literature. We apply this decomposition framework to a Global Input-Output Database (WIOD) that cover 44 countries and 56 industries from 2000 to2014 to uncover evolving compositions of different production activities. We also show that complex GVC activities co-move with global GDP growth more strongly than other types of production activities.

The research in the paper was carried out in part when Wei was the Chief Economist of the Asian Development Bank (ADB), and Yu and Zhu were consultants for the ADB. The views in the paper, however, are those of the authors and do not necessarily reflect the views and policies of ADB or its Board of Governors or the governments they represent, nor those of any other organization that the authors are affiliated with, nor those of the National Bureau of Economic Research. Zhi Wang acknowledges research and financial support from the Stanford Center for International Development. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w23261.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

for helpful comments. The paper represents the personal views of the authors, and all errors are the responsibilities of the authors alone. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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