Accumulating Trade Costs and Competitiveness in Global Value Chains

Diakantoni, Antonia; Escaith, Hubert; Roberts, Michael; Verbeet, Thomas

doi:10.2139/ssrn.2906866

Cited by 34 publications

(22 citation statements)

References 14 publications

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“…Diakantoni et al (2017) extend the classic effective protection formula to use data on bilateral input linkages and tariffs. Because their formula is based on the classic literature, strong (arguably implausible) assumptions are needed to interpret it as measuring effective protection in general equilibrium.…”

mentioning

confidence: 99%

Measuring Global Value Chains

Johnson

2018

Annu. Rev. Econ.

168

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Recent decades have seen the emergence of global value chains (GVCs), in which production stages for individual goods are broken apart and scattered across countries. Stimulated by these developments, there has been rapid progress in data and methods for measuring GVC linkages. The macro approach to measuring GVCs connects national input–output tables across borders by using bilateral trade data to construct global input–output tables. These tables have been applied to measure trade in value added, the length of and location of producers in GVCs, and price linkages across countries. The micro approach uses firm-level data to document firms’ input sourcing decisions, how import and export participation are linked, and how multinational firms organize their production networks. In this review, I evaluate progress in these two approaches, highlighting points of contact between them and areas that demand further work. I argue that further convergence between these approaches can strengthen both, yielding a more complete empirical portrait of GVCs.

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confidence: 99%

Measuring Global Value Chains

Johnson

2018

Annu. Rev. Econ.

168

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“…Cappariello et al (2018) use these measures to provide an assessment of the indirect costs of Brexit estimating both the cost-push effect of tariffs and the cumulative resistance of export flows. Diakantoni et al (2017) argue that after falling into relative obscurity, at least from a normative perspective, effective protection rates (EPRs) may return to the central stage as international trade moves from "trade in (final) goods" to "trade in tasks". Several contributions (Diakantoni and Escaith 2012;Rouzet and Miroudot 2013;Chen et al 2016) consider multiple border crossings in the traditional definition of the effective protection rate.…”

Section: Eu Trade Policy and Tariff Indexesmentioning

confidence: 99%

An assessment of import tariff costs for Italian exporting firms

2020

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Since production and trade are increasingly organized within global value chains (GVCs), assessing who effectively pays the cost of protection is not straightforward and since productive processes are internationally fragmented, quantifying the effects of trade policy requires an enhanced analytical framework that takes international input–output linkages into account to assess the implications trade costs have on competitiveness at national and sector levels. This paper defines a new synthetic measure of trade protection based on the value added in trade, capturing the effects that the tariff structure has on exporting firms that rely on imported intermediate inputs. The index, defined in a general equilibrium framework, provides a theoretically sound protection measurement in the context of GVCs. We assess trade protection by computing protection indexes at the bilateral level on both gross imports and imports to exports using the Global Trade Analysis Project computable general equilibrium model. These indexes are used to investigate the relationship between the European Union tariffs and integration of the Italian GVCs. In the case of Italy, imports to exports are overall less protected than gross imports with significant differences at the sector level. Despite the low levels of nominal protection, industrial sectors play a central role in explaining our results. EU tariffs mostly affect Italian exporting firms in the case of chemical products, wearing apparel and leather products.

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“…The report estimates that closing the infrastructure quantity and quality gap in Sub-Saharan Africa relative to the best performers in the world could increase the growth of GDP per capita in the region by 2.6% per year or 1.7% per year if it was to close the gap with the median of the rest of the developing world. Bank et al (2017) and Diakantoni et al (2017). Based on COMTRADE and World Bank data, the centrality indicator ranks a country's centrality to global value chains, taking into account direct and indirect trade flows to and from trading partners in the global production network.…”

Section: Challenges For the Least Developed Countriesmentioning

confidence: 99%

Infrastructure, value chains, and economic upgrades

Luo

2018

J Infrastruct Policy Dev

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Infrastructure development is critical to delivering growth, reducing poverty and addressing broader development goals, as argued in the World Bank Report Transformation through Infrastructure (2012). This paper surveys the literature of the linkages between infrastructure investment and economic growth, discusses the role of infrastructure in the participation of global value chains and in supporting economic upgrades, highlights the challenges faced the least developed countries and provides policy recommendations. It suggests that addressing the bottlenecks in infrastructure is a necessary condition to provide a window of opportunity for an economy to develop following its comparative advantage. With the right conditions, good infrastructure can support an economy, particularly a less developed economy, to reap the benefit through the participation in the global value chains to upgrade the economic structure.

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Accumulating Trade Costs and Competitiveness in Global Value Chains

Cited by 34 publications

References 14 publications

Measuring Global Value Chains

Measuring Global Value Chains

An assessment of import tariff costs for Italian exporting firms

Infrastructure, value chains, and economic upgrades

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