Five Facts about Value-Added Exports and Implications for Macroeconomics and Trade Research

Abstract

Due to the rise of global supply chains, gross exports do not accurately measure the amount of value added exchanged between countries. I highlight five facts about differences between gross and value-added exports. These differences are large and growing over time, currently around 25 percent, and manufacturing trade looks more important, relative to services, in gross than value-added terms. These differences are also heterogenous across countries and bilateral partners, and changing unevenly across countries and partners over time. Taking these differences into account enables researchers to obtain better quantitative answers to important macroeconomic and trade questions. I discuss how the facts inform analysis of the transmission of shocks across countries; the mechanics of trade balance adjustments; the impact of frictions on trade; the role of endowments and comparative advantage; and trade policy.

A Coasian Model of International Production Chains

“…A decrease in the VAX ratio reflects an increase in fragmentation across borders, because embodied import value accounts for a larger share of gross export value (Johnson 2014). In our two country model, the VAX ratio is below unity in both countries.…”

A Portrait of Trade in Value Added over Four Decades

“…3 See Daudin, Rifflart and Schweisguth (2011), Johnson and Noguera (2012a), Johnson (2014), Timmer et al (2014), Koopman, Wang and Wei (2014), Los, Timmer and de Vries (2015), and Kee and Tang (2016). 4 It also complements related data sets, such as the World Input-Output Database, which cover the post-1995 period only.…”

Structural Decomposition of Global Value Chains: Slovak Economy in an International Context

“…Export tak obsahuje podstatnú časť dvojitého započítavania a nadhodnocuje hodnotu pridanej hodnoty v exporte. Johnson (2014) uvádza, že rozdiely v hrubom exporte a pridanej hodnoty v exporte sú v priemere okolo 25 % a rastú v čase. Na to, že globálne hodnotové reťazce sa po prvýkrát v histórii stávajú skutočne globálne, poukázali Los, Timmer a de Vries (2015).…”