Networks of Value Added Trade
40 Pages Posted: 6 Jul 2016
Date Written: July 6, 2016
Global Value Chains (GVCs) became the paradigm for the production of most goods and services around the world. Hence, interconnections among countries can no longer be adequately assessed through standard bilateral gross trade flows and new methods of analysis are needed. In this paper, we compute measures of network analysis and apply visualisation tools to value added trade flows in order to understand the nature and dynamics of GVCs. The paper uses data on the bilateral foreign value added in exports for the period 1995-2011 and, in each year, GVCs are represented as directed networks of nodes (countries) and edges (value added flows). The analysis is extended beyond total trade flows to discuss the distinct roles of goods and services in GVCs. Moreover, the differences between Germany, the US, China and Russia as major suppliers of value added in GVCs are also examined.
Keywords: international trade, global value chains, network analysis, input-output tables
JEL Classification: F12, F14, C67
Suggested Citation: Suggested Citation