Transcript Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies www.wiiw.ac.at Decomposing net trade in value added and the patterns of trade in factors Robert Stehrer The Vienna.

Wiener Institut für
Internationale
Wirtschaftsvergleiche
The Vienna Institute for
International Economic
Studies
www.wiiw.ac.at
Decomposing net trade in value added and
the patterns of trade in factors
Robert Stehrer
The Vienna Institute for International Economic Studies (wiiw)
[email protected]
WTO workshop, February 2-4, 2011 – WTO, Geneva
Version: 2011-02-01
The WIOD-project is funded by the European Commission, Research Directorate General
as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and
Humanities, Grant Agreement no: 225 281.
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WIOD project – www.wiod.org
 The World Input-Output Database (WIOD)
 Project funded within the 7th framework program of the EU
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10+OECD partners involved
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Project started in May 2009 and ends in April 2012
 Construction and applications
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Construction of inter-country SUT/IO tables
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Socio-economic and environmental satellite accounts
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Data publicly available in May 2012
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Various applications ...
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WIOD project – Data coverage
 Inter-country Supply-Use and Input-Output tables
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Benchmarked to NA data
 Period: 1995-2006 (maybe with extension)
 40 countries included
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EU-15 countries
EU-12 countries
NAFTA: Canada, USA, Mexico
BRI: Brazil, Russia, India
CHN: China
OTHER: Turkey, Japan, South Korea, Taiwan, Indonesia, Australia
 Sector and product classifications of SUTs
-
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59 products (corresponding to CPA)
35 industries (corresponding to NACE rev. 1)
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WIOD project – Data coverage
 Trade data
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Goods trade (HS 6-digit – use category – CPA)
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Services trade (BoP codes)
 Satellite accounts
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Energy and environment (emmission, etc.)
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Socio-economic indicators
 Capital (ICT and Non-ICT)
 Labour by three educational attainment categories
 Deflated tables
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Dataflows and construction steps
Public
statistics
For each
country
International trade
statistics
(time-series)
National accounts
(time-series)
Supply and use tables
(infrequent)
Total Final demand by type
Total Export/Import
Value added by industry
Gross output by industry
Supply (Basic price)
Use (Purchasers' price)
Imports and exports
on bilateral basis
- of goods
- of services
Supply (Basic price)
Use (Basic price)
Valuation matrix
Bilateral import
shares by use
Harmonisation
Estimation
Time series
for each
country
Estimation
Time series
for each
country
Supply (Basic price)
Valuation matrix
Domestic use (Basic price)
Import use (Basic price) by
delivering country
Estimation
Time series
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World input-output tables
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Construction of International WIOT
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Country A
Country B
Rest of
World
Intermediate
use
Intermediate
use
Intermediate
use
Industry
Industry
Industry
Final
domestic
use
Final
domestic
use
Final
domestic
use
Total
Industry
Rest of World
(RoW)
Rest of World
Intermediate
use of
domestic
output
Intermediate Intermediate
Final use by
Final use of Final use by
use by B of use by RoW of
RoW of
Output
domestic B of exports
imports from imports from
exports from
in A
output
from A
A
A
A
Industry
Country B
Country B
Intermediate
use by A of
imports from
B
Intermediate Intermediate
Final use by
Final use by Final use of
use of
use by RoW of
RoW of
Output
A of exports domestic
domestic
imports from
exports from
in B
from B
output
output
B
B
Industry
Country A
Country A
Intermediate
use by A of
imports from
RoW
Intermediate
use by B of
imports from
RoW
Value added
Output in A
Value added Value added
Output in B Output in RoW
Intermediate
Final use by Final use by Final use of
use of
A of exports B of exports domestic
domestic
from RoW
from RoW
output
output
Output
in RoW
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Value added trade and the factor content of trade
Related literature
 Vertical specialisation
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Hummels, Ishii and Yi (2001), etc.
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Daudin, Rifflart and Schweisguth (2008, 2009)
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Johnson and Noguera (2009)
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Koopman, Power, Wang and Wei (2010)
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Many others
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Focus on exports
 Factor content of trade (when intermediates are traded)
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Reimer (2006)
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Trefler and Zhu (2010)
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Focus on HOV and relationship of trade in factors to endowments
 This approach:
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Foster and Stehrer (2011), forthcoming
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Focus: Decomposition of net trade in value added and components
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Value added trade and the factor content of trade
Accounting for trade in intermediates
(following Reimer, JIE 2006; Trefler and Zhu, JIE 2010)
N … Number of countries; G … Number of industries; F … Number of factors
Direct plus indirect factor input
B  D ( I  A)
1
A … coefficient matrix of dimension NG x NG
D … direct factor input matrix of dimension F x NG
‘Bilateral’ (NG x N) import-export matrix T  [ x
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rp
]
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Value added trade and the factor content of trade
Factor content of trade with three countries for country c=1
1 1
t  d k ' ( I  A) t
1
k
where
t  ( x , x , x )
1
1
21
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Some manipulations …
 v 1l 11 x 1*

1
2 21 1*
Tk   v l x
 3 31 1*
v l x
9
v l x
21
v l x
21
v l x
21
1 12
2 22
3 32


2 23 31
v l x 
3 33 31 
v l x 
v l x
1 13
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Value added trade and the factor content of trade
Direct exports
 v 1l 11 x 1*

1
2 21 1*
Tk   v l x
 3 31 1*
v l x
Indirect exports
1
(‘true’ VS1 )
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Re-Imports (VS1* 1 )
v l x
21
v l x
21
v l x
21
1 12
2 22
3 32


2 23 31
v l x 
3 33 31 
v l x 
v l x
1 13
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Indirect
imports
Direct imports
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Selected results
 Decomposition of net value added trade and components
 Regional patterns of net value added trade and components
 Notes:
•
•
•
•
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Focus of presentation on EU-15 and NAFTA
January 2011 version of WIOD
ROW not included in calculations
Results partly based on imputed values regarding factor inputs
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Decomposition of value added trade
EU-15
in bn US-$
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NAFTA
in bn US-$
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Decomposition of trade in labour
EU-15
in bn US-$
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NAFTA
in bn US-$
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Decomposition of trade in high-educated labour
EU-15
in bn US-$
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NAFTA
in bn US-$
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Net exports of EU-15
Goods and services
Value added
in bn US-$
in bn US-$
BRI
CHN
EU12
NAFTA
OTHER
TOTAL
EU15
NAFTA
100.0
100.0
50.0
50.0
0.0
0.0
-50.0
-50.0
-100.0
-100.0
-150.0
-150.0
-200.0
-200.0
-250.0
-250.0
-300.0
-300.0
1995
15
BRI
2000
2005
1995
CHN
EU12
OTHER
TOTAL
2000
EU15
2005
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Net exports of NAFTA
Goods and services
in bn US-$
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Value added
in bn US-$
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Net exports in labour and capital services – EU15
Labour
in bn US-$
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Capital
in bn US-$
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Net exports in labour and capital services – NAFTA
Labour
in bn US-$
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Capital
in bn US-$
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Net exports by educational categories
EU-15
in bn US-$
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NAFTA
in bn US-$
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Trade in value added: ICT capital
in bn US-$
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Next steps: Analysis
 Decomposition based on basic equation
1
TV , f  D ' ( I  A ) T
the obvious candidates which are mutually related
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(Directed) Factor and sector biased technical change
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Change in trade and output patterns
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Change in intermediates trade
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Change in factor rewards
 Further steps, extensions, caveats:
•
•
•
•
•
•
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Breakdown of trade data into final goods and intermediates (and subcomponents like P&C)
Sectoral breakdowns and differentiations
Bilateral relations
Testing HOV theorem with traded intermediates
Double counting problem
Non-competing imports
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Next steps: Data
Improvement on data
 Improving national SUTs
 Improving bilateral trade in services and trade in goods
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Re-exports
 Improving breakdown by use categories (see below)
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Comparing our use-classification of trade flows with official import IO tables.
 Improving factor input data for non-OECD countries
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as part of work by World KLEMS consortium
 Constant price series
 Additional data
 Processing export trade tables for Mexico and China
 Margin tables (transport costs, tariffs, and domestic margins of exports)
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Thank you for attention!
Robert Stehrer
The Vienna Institute for International Economic Studies – wiiw
www.wiiw.ac.at
[email protected]
The WIOD project: www.wiod.org
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