We provide a unified framework for measuring bilateral exports of value added. We outline a general methodology that encompasses the measures introduced by Johnson and Noguera (2012) (value added consumed abroad) and Los et al. (2016) (value added in exports), to which we refer as VAX-C and VAX-D, respectively. In addition we suggest a novel third measure, VAX-P, which indicates the value added used abroad in the final stage of production. We show that they can all be derived with the method of hypothetical extraction in a general input-output model. This is helpful in comparing and contrasting their characteristics. As a corollary, we show that for VAX-C and VAX-P the sum of bilateral measures is equal to the corresponding aggregate measure, but that this is generally not true for VAX-D. We illustrate all measures with empirical examples computed on the basis of the World Input-Output Database. These indicators can found at www.wiod.org.
#Scientific paper #Economic development and upgrading
Contributors from our Network
Bart Los
University of Groningen
Bart Los is professor of technological progress and structural change at the Groningen Growth and Development Centre at the University of Groningen, the Netherlands, and is currently vice-president of the international input-output association. He has been joint leader of the World Input-Output Database project (www.wiod.org), and has recently investigated the distribution of factor incomes in GVCs, as well as the role of GVCs in transmitting trade shocks, such as Brexit. He holds a PhD from the University of Twente, the Netherlands. Read more about Bart Los ›
Marcel Timmer
University of Groningen
Marcel Timmer is Deputy-Director of the CPB Netherlands Bureau for of Economic Policy Analysis and professor of economic growth and development at the Groningen Growth and Development Centre at the University of Groningen, the Netherlands. He has recently led the research program ‘Modelling Global Value Chains: a new framework to study trade, jobs and income inequality in an interdependent world’, which built on his contributions through the World Input-Output Database project (www.wiod.org). He holds a PhD from the Eindhoven University of Technology, the Netherlands. Read more about Marcel Timmer ›
