Networks of Value‐Added Trade

23 Pages Posted: 12 Jul 2017

See all articles by João Amador

João Amador

Bank of Portugal

Sónia Cabral

affiliation not provided to SSRN

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Date Written: July 2017

Abstract

Global value chains (GVCs) require new methods for evaluating interconnections among countries, which can no longer be accurately appraised by standard bilateral gross trade flows. This paper uses tools of network analysis to examine the evolution of value‐added trade from 1995 to 2011. GVCs are very centralised and asymmetric networks, with a few large economies acting as hubs, which exposes them to the propagation of idiosyncratic shocks. As GVCs expanded, the networks of foreign value added in exports became denser, more complex and intensively connected. The regional dimension of GVCs is still dominant but is progressively giving place to a more global network. Networks of foreign value added in goods exports outpace those of services exports. However, foreign inputs of services are important for exports of both goods and services. There is a striking rise of China as a supplier of value added, while Germany and the United States maintain a central role in GVCs over the whole period.

Suggested Citation

Amador, João and Cabral, Sónia, Networks of Value‐Added Trade (July 2017). The World Economy, Vol. 40, Issue 7, pp. 1291-1313, 2017, Available at SSRN: https://ssrn.com/abstract=3000648 or http://dx.doi.org/10.1111/twec.12469

João Amador (Contact Author)

Bank of Portugal ( email )

Rua Francisco Ribeiro, 2
Lisbon, 1150-165
Portugal

Sónia Cabral

affiliation not provided to SSRN

No Address Available

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