Reports
Discussion Papers
No.530 Measuring Smile Curves in Global Value Chains
by Ming YE, Bo MENG , and Shang-jin WEI
August 2015
ABSTRACT
The
concept
and
logic
of
the
“smile
curve”
in
the
context
of
global
value
chains
has
been
widely
used
and
discussed
at
the
individual
firm
level,
but
rarely
identified
and
investigated
at
the
country
and
industry
levels
by
using
real
data.
This
paper
proposes
an
idea,
based
on
an
inter-country
input-output
model,
to
consistently
measure
both
the
strength
and
length
of
linkages
between
producers
and
consumers
along
global
value
chains.
This
idea
allows
for
better
identification
and
mapping
of
smile
curves
for
countries
and
industries
according
to
their
positions
and
degrees
of
participation
in
a
given
conceptual
value
chain.
Using
the
1995-2011
World
Input-Output
Tables,
several
conceptual
value
chains
are
investigated,
including
exports
of
electrical
and
optical
equipment
from
China
and
Mexico
and
exports
of
automobiles
from
Japan
and
Germany.
The
identified
smile
curves
provide
a
very
intuitive
and
visual
image,
which
can
significantly
improve
our
understanding
of
the
roles
played
by
different
countries
and
industries
in
global
value
chains.
Further,
the
smile
curves
help
identify
the
benefits
gained
by
these
countries
and
industries
through
their
participation
in
global
trade.
Keywords:
Smile
curve,
Global
value
chains,
APL,
Fragmentation
of
production
JEL
classification:
F6,
F13,
F15,
D57
Please note that discussion papers are works in various stages of progress and most have not been edited and proofread and may contain errors of fact or judgment. Revised versions of these papers may subsequently appear in more formal publication series. The views expressed in this publication are those of the author(s). The IDE does not guarantee the accuracy of the data included and accepts no responsibility for any consequences arising from its use.