Measuring Vertical Specialization: The Case of China

17 Pages Posted: 7 Sep 2011

See all articles by Judith M. Dean

Judith M. Dean

affiliation not provided to SSRN

K. C. Fung

University of California, Santa Cruz - Department of Economics

Date Written: September 2011

Abstract

The explosive growth of Chinese trade may be due to international production fragmentation, but few have assessed these phenomena together, in part, because it is difficult to measure the vertical specialization (VS) of China's trade. Unique features of China's processing trade cause both identification of imported inputs and their allocation across sectors to vary by trade regime. This paper estimates the VS of Chinese merchandise exports, addressing these two challenges. A new method to identify Chinese imported inputs is developed, and used to calculate VS by sector and destination. VS estimates based on the official Chinese input–output table are contrasted with those based on a split table, capturing processing and normal exports separately. Last, the paper tests whether Chinese “export sophistication” can be explained by VS.

Suggested Citation

Dean, Judith M. and Fung, K. C., Measuring Vertical Specialization: The Case of China (September 2011). Review of International Economics, Vol. 19, Issue 4, pp. 609-625, 2011, Available at SSRN: https://ssrn.com/abstract=1923503 or http://dx.doi.org/10.1111/j.1467-9396.2011.00969.x

Judith M. Dean

affiliation not provided to SSRN

No Address Available

K. C. Fung (Contact Author)

University of California, Santa Cruz - Department of Economics ( email )

Santa Cruz, CA 95064
United States
831-459-3273 (Phone)
831-459-5077 (Fax)

HOME PAGE: http://econ.ucsc.edu/Faculty/facFung.shtml

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