Tracing Value-Added and Double Counting in Gross Exports

American Economic Review · 2014 · Volume 104 · Issue 2

Abstract

This paper proposes an accounting framework that breaks up a country's gross exports into various value-added components by source and additional double-counted terms. Our parsimonious framework bridges a gap between official trade statistics (in gross value terms) and national accounts (in value-added terms), and 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.

Keywords

Measurement and Data on National Income and Product Accounts and Wealth, Environmental Accounts, General Aggregative Models: Social Accounting Matrix, Empirical Studies of Trade, Multinational Firms, International Business, Transactional Relationships, Contracts and Reputation, Networks

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