Topology of Global Value Chains: Focus on the Manufacturing Industry, 2000–2015

Discussion Papers

No.637

by Hao XIAO, Jiemin GUO, Bo MENG, Tianyang SUN

March 2017

ABSTRACT

The increasing presence of global value chains (GVCs) has been considered one of the most important phenomena of 21st century international trade. A better understanding of GVCs is crucial for both trade policy making and business practices. This study applies various network analysis tools to the new GVC accounting system in which gross exports are decomposed into value-added terms through various GVC routes based on the ADB Multi-Regional Input–Output Tables (2000–2015). Using the proposed decomposition framework, the study helps divide manufacturing-related GVCs into sub-networks with clear visualization of countries’ participation patterns. The empirical results show that GVCs are not always like "chains", but complex networks of hubs and spokes; GVCs are not very "global", but still remain to be "regional". These findings can significantly improve our understanding of the interdependency of countries in GVCs, which are normally invisible in traditional trade statistics.

Keywords: value chains, topology, networks, international trade, trade in value-added
JEL classification: F6, F13, F15, D57

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