Reports
Discussion Papers
No.736 Are global value chains truly global? A new perspective based on the measure of trade in value-added
by Bo Meng, Hao Xiao, Jiabai Ye, and Shantong Li
January 2019
ABSTRACT
Are global value chains (GVCs) truly global or are they more of a regional phenomenon? Opinions concerning this issue are widely divergent in the literature. This paper provides new perspectives on GVCs using network analysis based on the concept of trade in value-added. By using a multiregional input-output model, we first show that GVC activities can be consistently identified at the country, sector, and bilateral levels according to the number of times that factor contents cross national borders in global production sharing. This allows us to group trade-related, value-added creation activities into three networks, including traditional trade, simple GVC trade, and complex GVC trade networks. Further, we use network analysis tools based on the Asian Development Bank’s Multiregional Input-Output Tables covering 62 economies and 35 sectors between 2000 and 2017 to investigate changes in the topology and structure of different types of GVC networks. Our results show that the characteristics of GVCs largely depend on the viewpoint of the participating country (as a supplier or demander), the type of trade, and the aggregate level of trade in the corresponding networks.
Keywords: global value chains, network, trade in value-added, input-output model
JEL classification: F6, F13, F15, D57
PDF available at http://hdl.handle.net/2344/00050698
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.