Marco Buti, István Székely, 28 June 2019

The EU11 economies are among the most open economies globally. The process of trade integration and the creation of GVCs have also drove a significant inflow of FDI into these countries. This column shows that while integration in the EU and FDI have enhanced their growth potential, these developments have also made them more vulnerable to external shocks. Domestic and EU-level reforms in the EU11 should focus on increasing economic and social resilience. 

Carlo Altomonte, Laura Bonacorsi, Italo Colantone, 28 January 2019

Amid Brexit and protectionist moves by President Trump, many observers are warning about the negative effects that a rise in trade barriers could have on growth. This column first highlights the important role acquired by deep-water ports as main hubs for trade during 1995-2007 and how they have allowed countries to gain from trade.  It then shows that becoming embedded in global value chains is a powerful determinant of growth, even if it implies that a growing share of gross exports represents value added that has been produced in foreign countries. 

Maarten Bosker, Bastian Westbrock, 04 January 2019

Much has been written about the opportunities and threats arising from the international fragmentation of production processes. This column introduces a novel theoretical approach to track down the different, sometimes conflicting, ways in which shocks spread through global value chains. It suggests that what matters most is not a country's access to the technologies and markets of its direct trading partners, but its exposure to changes in the larger production network.

Mauro Boffa, Marion Jansen, Olga Solleder, 15 December 2018

In a world where trade policies and trade alliances are changing, global value chains are likely to be affected, with implications for policymakers seeking economic development through value chain integration.This column combines information on the value-added decomposition of gross exports with information from the World Bank’s Content of Preferential Trade Agreements Database to examine which policy mixes are more conducive for value chain activity. Value-chain players are found to prefer more integrated regions. 

Wen Chen, Bart Los, Marcel Timmer, 10 December 2018

Intangibles are on the rise, yet their measurement is elusive. This column argues that a global value chain perspective on factor incomes provides new insights. It documents a rapid increase in the share of ‘factorless’ income in global value chains in the 2000s and argues that this period should be seen as an exceptional period in the global economy during which multinational firms benefitted from reduced labour costs through offshoring, while capitalising on firm-specific intangibles at little marginal cost.

Francois de Soyres, Erik Frohm, Vanessa Gunnella, Elena Pavlova, 09 October 2018

When a country’s currency depreciates, its export volumes are expected to increase. Yet some recent episodes suggest that exports now barely respond to significant exchange rate movements. This column argues that global value chains are an important part of the answer, as countries now need to import to export, and often re-import their exports. To assess the consequences of international input-output linkages on exchange rate elasticities, policymakers need indices of global value chain participation based on currencies rather than countries.

Lionel Fontagné, Gianluca Santoni, 30 April 2018

Country-pairs self-select in regional trade agreements, and this endogeneity biases the estimation of the impact of such agreements within a gravity framework. This column uses a framework for predicting which countries should engage in RTAs based solely on economic determinants, including global value chains, and compares this ‘natural’ geography of agreements with the actual geography. The results suggest that the endogenous geography of RTAs is shaped by the development of GVCs.

Naomitsu Yashiro, Konstantins Benkovskis, Jaan Masso, Olegs Tkacevs, Priit Vahter, 13 April 2018

Participation in global value chains provides emerging economies with opportunities for fast-track development and technological upgrading. This column argues that countries need to diversify their exports into knowledge-intensive products and services that generate high value added to make the most out of learning by exporting. Countries that specialise in standardised, generic products or services may not enjoy sufficient improvements in productivity, even if such exports channel knowledge transfer.

Vito Amendolagine, Andrea Presbitero, Roberta Rabellotti, Marco Sanfilippo, 24 January 2018

A new wave of foreign direct investment has swept sub-Saharan African countries, with inflows becoming more diversified both geographically and sectorally. This column presents an analysis that shows a high degree of complementarity between involvement in global value chains and FDI. Policies supporting the entry and upgrading of countries in such chains – especially via a strong institutional setting and a well-educated labour force – can help maximise the spillovers from foreign investment.

Koji Ito, Ivan Deseatnicov, Kyoji Fukao, 23 January 2018

The study of global value chains has become increasingly relevant as production becomes more and more fragmented across countries. This column uses evidence from Japan to evaluate recent theories that such chains have caused some of the country’s industries to become less competitive. The findings suggest that considering production for exports and domestic sales separately may provide a more complete picture of firm heterogeneity within industries, and a more complete picture of interconnected countries at the industry level.

Yuqing Xing, 28 September 2017

The last few decades have seen the US running its largest ever trade deficit. This column uses the case of Apple to demonstrate that the failure of trade statistics to capture flows of intellectual property embedded in exports explains a significant share of this deficit. Reforming trade statistics by including the value added of intellectual property embedded in products manufactured abroad is an essential step towards a better understanding of how trade benefits all countries involved, in particular countries specialising in exporting intangible intellectual property.

Victor Kummritz, Bastiaan Quast, 25 February 2017

Global value chains offer a new way for developing countries to industrialise. This column provides a deep examination of the pattern of developing countries’ integration in these chains and shows that changes in integration are increasingly driven by low- and middle-income countries, while the integration of high-income countries has begun to even out. It also shows that low- and middle-income countries are still more specialised in downstream activities and typically export less domestic value added.

João Amador, Sónia Cabral, 23 December 2016

Global Value Chains have become the paradigm for the international organisation of production in almost all sectors. Bilateral gross trade flows no longer accurately represent interconnections among countries, so new methods of analysis are needed. Using tools of network analysis, this column assesses the roles of goods and services as both inputs and outputs in GVCs between 1995 and 2011 and examines the profile of Germany, the US, China and Russia as suppliers of value added.

Laurie Reijnders, Marcel Timmer, Xianjia Ye, 25 October 2016

Offshoring and biases in technical change can have observationally equivalent effects on domestic labour demand, which precludes a quantification of their relative impacts. This column shows how biased technical change can be identified by studying global value chains that include all stages of production, both at home and abroad. It finds that technical change has been strongly biased against less-skilled workers, and in favour of high-skilled labour and capital.

Hylke Vandenbussche, Christian Viegelahn, 02 October 2016

In a world where production is increasingly fragmented across borders, a large number of firms import their raw material inputs from abroad. This column investigates how firms’ input and output choices are affected by import tariffs on inputs that domestic firms use in production. Based on firm-product level data for India, it finds that firms decrease their use of inputs subject to the tariff, relative to other inputs. Firms also decrease their sales of outputs made of these inputs, relative to other outputs.

Masayuki Morikawa, 23 June 2016

The shifting balance between manufacturing and service industries in developed economies has significant implications for long-term growth and international trade. This column uses Japanese firm-level data to analyse the impact of ‘factoryless goods producers’ on overall productivity. As these producers specialise in tasks in which advanced economies have a comparative advantage, it is anticipated that when combined with falling production costs and trade liberalisation, they will contribute to economic growth.

Cristina Constantinescu, Aaditya Mattoo, Michele Ruta, 25 May 2016

Trade has been growing more slowly since the Great Recession not only because global GDP growth is lower, but also because trade itself has become less responsive to GDP. The causes of the changing trade-income relationship have been studied, but its consequences have not. This column presents a simple framework to assess some of the demand-side and supply-side implications. The change hurts growth, although the quantifiable effects are not large.  

João Amador, Filippo di Mauro, 09 September 2015

There is an urgent need for policymakers to fully acknowledge the extent to which conventional indicators related to gross trade are severely flawed as policy benchmarks because they fail to take into account the existence of global value chains and their increasing role in shaping the global economy. This column, which introduces a new Vox eBook, urges academics to start proposing workable indicators that are systematically produced and readily available.

Bernard Hoekman, 24 June 2015

The world’s trade-to-GDP ratio climbed steadily for six decades. The rise slowed even before the Global Crisis and world trade growth has been anaemic since 2010. Recent data shows it declining, leading some to wonder whether global trade has peaked. This column introduces a new eBook that examines the issue from a wide range of perspectives. No consensus emerges but it is clear that this is not just a cyclical issue – something structural changed. 

Timothy Sturgeon, 20 May 2015

With global value chains that fragment production across the world, national statistics fail to capture the growing interconnectedness of economies. This column describes the international input-output tables that allow researchers to estimate the share of a country’s export value derived from imported inputs. However, while these tools offer promising uses, at the moment statistics on trade in value added should be treated with great caution.

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Events

  • 17 - 18 August 2019 / Peking University, Beijing / Chinese University of Hong Kong – Tsinghua University Joint Research Center for Chinese Economy, the Institute for Emerging Market Studies at Hong Kong University of Science and Technology, the Guanghua School of Management at Peking University, the Stanford Center on Global Poverty and Development at Stanford University, the School of Economics and Management at Tsinghua University, BREAD, NBER and CEPR
  • 19 - 20 August 2019 / Vienna, Palais Coburg / WU Research Institute for Capital Markets (ISK)
  • 29 - 30 August 2019 / Galatina, Italy /
  • 4 - 5 September 2019 / Roma Eventi, Congress Center, Pontificia Università Gregoriana Piazza della Pilotta, 4, Rome, Italy / European Center of Sustainable Development , CIT University
  • 9 - 14 September 2019 / Guildford, Surrey, UK / The University of Surrey

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