DP9245 Tracing Value-Added and Double Counting in Gross Exports

Author(s): Robert Koopman, Zhi Wang, Shang-Jin Wei
Publication Date: December 2012
Keyword(s): global production chains, value added exports, vertical specialization
JEL(s): F10
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=9245

This paper proposes a framework for gross exports accounting that breaks up a country?s gross exports into various value-added components by source and additional double counted terms. By identifying which parts of the official trade data are double counted and the sources of the double counting, it bridges official trade (in gross value terms) and national accounts statistics (in value added terms). Our parsimonious framework integrates all previous measures of vertical specialization and value-added trade in the literature into a unified framework. To illustrate the potential of such a method, we present a number of applications including re-computing revealed comparative advantages and the magnifying impact of multi-stage production on trade costs.