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Groningen Growth and Development Centre

Faculty of Economics and Business
Global Value Chains WIOD

Research and Policy Impact

Recent policy reports based on WIOD data

Asian Development bank (ADB), Research institute for Global Value Chains at the university of international business and economics (RI GVC), the World trade organization (WTO), the institute of Developing economies – Japan external trade organization (IDE JETRO), and the China Development Research Foundation (2021)

Global Value Chain Development Report 2021: Beyond Production

World Bank (2020)

"World Development Report 2020: Trading for Development in the Age of Global Value Chains"

McKinsey Global Institute (2019)

"Globalization in Transition: The Future of Trade and Value Chains"

World Bank, OECD and others (2017)

"Measuring and Analyzing the Impact of GVCs on Economic Development"

UNIDO (2016)

"Industrial Development Report 2016, The Role of Technology and Innovation in Inclusive and Sustainable Industrial Development"

J. Amador and F. di Mauro

"The Age of Global Value Chains" CEPR Press, 2015

F. di Mauro, H. Plamper and R. Stehrer

"Global Value Chains: A Case for Europe to Cheer Up" Compnet Policy Brief 03/2013, European Central Bank, August 2013

M. Saito, M. Ruta and J. Turunen

"Trade Interconnectedness: The World with Global Value Chains" IMF Policy Paper, August 2013

Michael Gasiorek, Javier Lopez Gonzalez et al.

"China-EU global value chains: who creates value, how and where? - growing linkages and opportunities" Final Report 2013 for DG Trade of the European Commission

European Commission, DG Enterprise and Industry

"European Competitiveness Report 2012: Reaping the Benefits of Globalization"

Selected recent research output based on WIOD

M. Duarte and D. Restuccia (2020), "Relative Prices and Sectoral Productivity", Journal of t he European Economic Association, 18(3), pp. 1400-1443

The relative price of services rises with development. A standard interpretation of this fact is that productivity differences across countries are larger in manufacturing than in services. The service sector comprises heterogeneous categories and we document that many disaggregated service categories feature a negative income elasticity of relative prices. We divide service industries into two broad categories based on the income gradient of its relative price: traditional services with positive income elasticities and nontraditional services with negative income elasticities of relative prices. Using an otherwise standard multisector development accounting framework extended to include an input–output structure, we find that the cross-country income elasticity of sectoral productivity is large in nontraditional services (1.15), smaller in manufacturing (1.05), and much smaller in traditional services (0.67). Eliminating cross-country productivity differences in nontraditional services reduces aggregate income disparity by 58%, a 7.9-fold reduction in aggregate productivity differences. Heterogeneity between traditional and nontraditional services also has a substantial impact on aggregate productivity.

P. Antràs and A. de Gortari (2020), "On the Geography of Global Value Chains", Econometrica, 88(4), pp. 1553-1598

This paper develops a multi‐stage general‐equilibrium model of global value chains (GVCs) and studies the specialization of countries within GVCs in a world with barriers to international trade. With costly trade, the optimal location of production of a given stage in a GVC is not only a function of the marginal cost at which that stage can be produced in a given country, but is also shaped by the proximity of that location to the precedent and the subsequent desired locations of production. We show that, other things equal, it is optimal to locate relatively downstream stages of production in relatively central locations. We also develop and estimate a tractable, quantifiable version of our model that illustrates how changes in trade costs affect the extent to which various countries participate in domestic, regional, or global value chains, and traces the real income consequences of these changes.

J.R. Steinberg (2019) "Brexit and the Macroeconomic Impact of Trade Policy Uncertainty", Journal of International Economics, 117(1), pp. 175-195

On June 23, 2016, the United Kingdom voted to leave the European Union. The trade policies that will replace E.U. membership are uncertain, however, and speculation abounds that this uncertainty will cause immediate harm to the U.K. economy. In this paper, I use a dynamic general equilibrium model with heterogeneous firms, endogenous export participation, and stochastic trade costs to quantify the impact of uncertainty about post-Brexit trade policies. I find that the total consumption-equivalent welfare cost of Brexit for U.K. households is between 0.4 and 1.2%, but less than a quarter of a percent of this cost is due to uncertainty.

R.A. Auer, A.A. Levchenko and P. Sauré (2019), "International Inflation Spillovers through Input Linkages", Review of Economics and Statistics, 101(3), pp. 507-521

We document that international input-output linkages contribute substantially to synchronizing producer price inflation (PPI) across countries. Using a multicountry, industry-level data set that combines information on PPI and exchange rates with global input-output linkages, we recover the underlying cost shocks that are propagated internationally via the global input-output network, thus generating the observed dynamics of PPI. We then compare the extent to which common global factors account for the variation in actual PPI and in the underlying cost shocks. Across a range of econometric tests, input-output linkages account for half of the global component of PPI inflation.

M. Sposi (2019), "Evolving Comparative Advantage, Sectoral Linkages and Structural Change", Journal of Monetary Economics, 103(1), pp. 75-87

Intermediate-input intensities vary systematically with economic development across countries. These cross-country differences in input–output linkages account for 74% of the curvature in the hump shape in industry’s share in value added across levels of income per capita. This is twice as much as can be accounted for by variation in the composition of final demand. Using a three-sector, open-economy model of structural change I find that this result is robust to general equilibrium effects.

J.S. Shapiro and R. Walker (2018), "Why is Pollution from US Manufacturing Declining? The Roles of Environmental Regulation, Productivity and Trade", American Economic Review, 108(12), pp. 3814-3854

Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for most of the emissions reductions.

C. Papageorgiou, M. Saam and P. Schulte (2017), "Substitution between Clean and Dirty Energy Inputs: A Macroeconomic Perspective", Review of Economics and Statistics, 99(2), pp. 281-290

In macroeconomic models, the elasticity of substitution between clean and dirty energy inputs within the energy aggregate is a central parameter in assessing the necessary conditions for long-run green growth. Using new sectoral data in a panel of 26 countries, we formulate specifications of nested constant elasticity of substitution production functions that allow estimating this parameter for the first time. We present evidence that it significantly exceeds unity, a favorable condition for promoting green growth.

R. Adao, A. Costinot, and D. Donaldson (2017), "Nonparametric Counterfactual Predictions in Neoclassical Models of International Trade", American Economic Review, 107(3), pp. 633-689

We develop a methodology to construct nonparametric counterfactual predictions, free of functional form restrictions on preferences and technology, in neoclassical models of international trade. First, we establish the equivalence between such models and reduced exchange models in which countries directly exchange factor services. This equivalence implies that, for an arbitrary change in trade costs, counterfactual changes in the factor content of trade, factor prices, and welfare only depend on the shape of a reduced factor demand system. Second, we provide sufficient conditions under which estimates of this system can be recovered nonparametrically. Together, these results offer a strict generalization of the parametric approach used in so-called gravity models. Finally, we use China's recent integration into the world economy to illustrate the feasibility and potential benefits of our approach.

P.D. Fajgelbaum and A.K. Khandelwal (2016), "Measuring the Unequal Gains from Trade", Quarterly Journal of Economics, 131(3), pp. 1113-1180

Individuals that consume different baskets of goods are differentially affected by relative price changes caused by international trade. We develop a methodology to measure the unequal gains from trade across consumers within countries. The approach requires data on aggregate expenditures and parameters estimated from a nonhomothetic gravity equation. We find that trade typically favors the poor, who concentrate spending in more traded sectors.

M.P. Timmer, A.A. Erumban, B. Los, R. Stehrer and G.J. de Vries (2014), "Slicing Up Global Value Chains", Journal of Economic Perspectives, 28(2), pp. 99-118

In this paper, we "slice up the global value chain" using a decomposition technique that has recently become feasible due to the development of the World Input-Output Database. We trace the value added by all labor and capital that is directly and indirectly needed for the production of final manufacturing goods. The production systems of these goods are highly prone to international fragmentation as many stages can be undertaken in any country with little variation in quality. We seek to establish a series of facts concerning the global fragmentation of production that can serve as a starting point for future analysis. We describe four major trends. First, international fragmentation, as measured by the foreign value-added content of production, has rapidly increased since the early 1990s. Second, in most global value chains there is a strong shift towards value being added by capital and high-skilled labor, and away from less-skilled labor. Third, within global value chains, advanced nations increasingly specialize in activities carried out by high-skilled workers. Fourth, emerging economies surprisingly specialize in capital-intensive activities.

Other IO-Databases

A non-exhaustive list of other IO-data initiatives, comparable and/or related to WIOD, is presented below.

OECD/WTO Trade in Value Added database
The 2018 edition of the TiVA database provides indicators for 64 economies including all OECD, EU28 and G20 countries, most East and South-east Asian economies and a selection of South American countries. 36 unique industrial sectors are represented within a hierarchy, including aggregates for total manufactures and total services. This edition covers the period 2005 to 2015, with preliminary projections to 2016 for some indicators. The underlying Inter-Country Input-Output (ICIO) tables are based on statistics compiled according to the 2008 System of National Accounts (SNA 2008) from national, regional and international sources and uses an industry list based on the International Standard Industrial Classification (ISIC) Revision 4.
More information can be found on the website.

Asian Development Bank, multi-regional input-output tables (ADB-MRIO)
The Asian Development Bank has augmented the World Input-Output Tables (Timmer et al., 2015) in order to facilitate analysis work related to the Asia and the Pacific Region. Nineteen (19) Asian economies have been added into the WIOTs for the years 2000, 2007 to 2018, namely: Bangladesh, Bhutan, Brunei Darussalam, Cambodia, Fiji, Hong Kong, China, Kazakhstan, Kyrgyz Republic, Lao People’s Democratic Republic, Malaysia, Maldives, Mongolia, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Thailand, and Viet Nam. This has facilitated the production and analysis of global value chain-related statistics for 25 Asian economies.
More information can be found on the website.

Additional Global Value Chain Research

Replication packages, tables, and figures for selected papers can be found in the GVC Research section.

Last modified:19 November 2021 4.31 p.m.