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Groningen Growth and Development Centre

Faculty of Economics and Business
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Patterns of vertical specialisation

Date:05 June 2019
Global trend in vertical specialisation
Global trend in vertical specialisation

In a recently published paper in the Review of World Economics, Stefan Pahl and Marcel Timmer document a new set of stylized facts on vertical specialisation since 1970. They construct new data to estimate the domestic value-added content in exports (VAX-D ratio) for a large set of developed and developing countries. This shows, for example, that almost all countries initiated vertical specialisation at least once. The global decline in the VAX-D ratio was mostly accounted for by substitution of foreign for domestic intermediates. This research provides a start for better understanding the causes and consequences of vertical specialisation in trade. 

Tags: Publication, WIOD