On the measurement of upstreamness and downstreamness in global value chains

Davin Chor, Pol Antràs
2018
DOI number
https://www.taylorfrancis.com/chapters/measurement-upstreamness-downstreamness-global-value-chains-pol-antr%C3%A0s-davin-chor/e/10.4324/9781351061544-5?context=ubx&refId=018fe117-ba38-42ba-b09e-e0b866026843
#Trade and FDI

Additional info: Eds: Lili Yan Ing and Miaojie Yu

This paper offers four contributions to the empirical literature on global value chains (GVCs). First, we provide a succinct overview of several measures developed to capture the upstreamness or downstreamness of industries and countries in GVCs. Second, we employ data from the World Input-Output Database (WIOD) to document the empirical evolution of these measures over the period 1995-2011; in doing so, we highlight salient patterns related to countries’ GVC positioning – as well as some puzzling correlations – that emerge from the data. Third, we develop a theoretical framework – which builds on Caliendo and Parro’s (2015) variant of the Eaton and Kortum (2002) model – that provides a structural interpretation of all the entries of the WIOD in a given year. Fourth, we resort to a calibrated version of the model to perform counterfactual exercises that: (i) sharpen our understanding of the independent effect of several factors in explaining the observed empirical patterns in the period 1995-2011; and (ii) provide guidance for how future changes in the world economy are likely to shape the positioning of countries in GVCs.

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