Publication: Trade in Value Added : Developing New Measures of Cross-Border Trade
Loading...
Other Files
549 downloads
Date
2013
ISSN
Published
2013
Author(s)
Editor(s)
Abstract
This volume includes papers that were first presented and discussed at a workshop on 'The Fragmentation of Global Production and Trade in Value- Added: Developing New Measures of Cross Border Trade', held at the World Bank in Washington, DC, on 9 to 10 June, 2011. This publication is structured as follows: chapter one gives and overview of measuring trade in value added when production is fragmented across countries. Chapter two discusses policy rationale and methodological challenges towards the measurement of trade in value-added terms. Chapter three highlights the importance of measuring trade in value added. Chapter four computes and analyses the value-added content of trade. Chapter five proposes an accounting framework for estimating the domestic and foreign content share in a country's exports when processing trade is prevalent. Chapter six provides estimates of foreign and domestic content in Mexico's manufacturing exports that take into account the import content in production under the maquiladora and Programa de Importacion Temporal para Producir Articulos de Exportacion (PITEX) programmes. Chapter seven gives empirical evidence that the standard gravity equation performs poorly by some measures when it is applied to bilateral flows where parts and components trade is important. It also provides a simple theoretical foundation for a modified gravity equation that is suited to explain trade where international supply chains are important. Chapter eight provides methodological guidelines on how to compute import coefficients at the level of the firm and shows how trade micro-data, can refine the aggregate nature of the indicators in input-output (IO) tables, by increasing their granularity. Chapter nine reviews the availability of underlying source data, summarizes the assumptions and describes the harmonization techniques used. Chapter ten gives three-stage reconciliation method to construct a time series international IO database. Chapter eleven gives direct measurement for collecting product- and firm-level statistics on value added and business function outsourcing and offshoring. Chapter twelve focuses on statistics and measures that are developed and used for defining and monitoring trade policy and economic development. Each chapter gives references at the end.
Link to Data Set
Citation
“Wang, Zhi; Wei, Shang-Jin; Mattoo, Aaditya. 2013. Trade in Value Added : Developing New Measures of Cross-Border Trade. © World Bank. http://hdl.handle.net/10986/15809 License: CC BY-NC-ND 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication Cross-Border Mergers and Acquisitions in Services : The Role of Policy and Industrial Structure(World Bank, Washington, DC, 2014-06)This paper presents evidence on the determinants of cross-border mergers and acquisitions in services sectors. It develops a stylized model of mergers and acquisitions that predicts that the incidence of merger and acquisition deals depends, inter alia, on the target economy's size, industrial structure and investment policies, as well as on bilateral transactions costs. These predictions are examined with bilateral merger and acquisition flow data and detailed information on policy barriers from a new database of restrictions on services investment. The analysis finds that: (1) geographical factors affect mergers and acquisitions in services and manufacturing similarly but cultural factors affect mergers and acquisitions in services more than in manufacturing. (2) Controlling for these bilateral factors, restrictive investment policies reduce the probability of merger and acquisition inflows but this negative effect is mitigated in countries with relatively large shares of manufacturing and (to a lesser extent) services in gross domestic product. The same results hold for the number of merger and acquisition deals received. These findings suggest that the impact of policy is state-dependent and related to the composition of gross domestic product in the target economy.Publication Services Development and Comparative Advantage in Manufacturing(World Bank, Washington, DC, 2018-05)Most manufacturing activities use inputs from the financial and business services sectors. But these services sectors also compete for resources with manufacturing activities, provoking concerns about de-industrialization -- financial services in industrial countries like the United States and the United Kingdom, and business services in developing countries like India and the Philippines. This paper examines the implications of services development for the export performance of manufacturing sectors. It develops a methodology to quantify the indirect role of services in international trade in goods and constructs new measures of revealed comparative advantage based on domestic value added in gross exports. The paper shows that the development of financial and business services enhances the revealed comparative advantage of manufacturing sectors that use these services intensively but not that of other manufacturing sectors. It also finds that a country can partially overcome the handicap of an underdeveloped domestic services sector by relying more on imported services inputs. Thus, lower services trade barriers in developing countries can help to promote their manufacturing exports.Publication Changes in Cross-Border Trade Costs in the Pan-Arab Free Trade Area, 2001–2008(2009-08-01)The Pan-Arab Free Trade Area, negotiated under auspices of the Arab League, came into force in 1997. Under the agreement all tariffs on goods of Arab origin were to be removed by January 1, 2005. This paper summarizes the results of a firm-level survey in nine countries regarding the implementation of the Pan-Arab Free Trade Area. A majority of respondent companies report that tariffs on intra-regional trade have largely been removed, and that there has been a marked improvement in customs clearance-related procedures. Costs associated with administrative red tape and weaknesses in transport-related infrastructure services are ranked as the most important constraints to intra-regional trade. This suggests that from a policy perspective, efforts to reduce real trade costs deserve priority, including transportation and logistics services. Periodic monitoring and assessment of trade incentives and performance would help governments to benchmark performance and identify priority areas for action, at both the national and the sub-regional levels.Publication Borderless Bazaars and Regional Integration in Central Asia : Emerging Patterns of Trade and Cross-Border Cooperation(Washington, DC: World Bank, 2012-05-25)Local populations' economic opportunities can be enhanced through special arrangements governing movement of people and goods in neighboring areas. For instance, in the Tajikistan-Uzbekistan border-crossing points (BCPs), preferential treatment accorded to residents in contiguous regions varies from one BCP to another, even within one borderline, restricting the distance allowed for travel into the territory of another country to the closest large city or marketplace. When governments impose restrictions on the movements of individuals, vehicles, or goods or close BCPs or bazaars, they may do so on public policy grounds. Security is often cited as a factor for imposing controls, as is prevention of contraband trade. Such government imposed obstacles are a blunt and expensive instrument to attain such public policy aims. The income and welfare costs levied on poor communities of such public policies may be disproportionate to achieve stated public policy goals. Instead, BCPs and bazaars could be opened but made subject to strict and effective policing, ideally using risk-based criteria; similarly, risk-based surveillance or vehicle searches could take the place of an outright ban. Moreover, a government may find that the security benefits of stronger community ties across borders may be considerable; after all, in conditions of growing trade that obviously contributes to the prosperity of a border community, all parties have a stake in suppressing criminal behavior and public disorder and in promoting orderly conditions that minimize the likelihood of the need for security services to intervene. In summary, support for border trade is a win-win strategy for any pair of countries. Government-imposed restrictions may constrict trade and raise its cost, but they do not necessarily eliminate local trade, especially among countries with established cultural, ethnic, and economic ties, which is the case of the former Soviet republics in Central Asia. Such restrictions raise transaction costs and incentivize smuggling. They greatly reduce the beneficial impact on income and employment that can arise from border trade, leading to large welfare losses for communities. The most significant effect of growth in border trade is likely to be poverty reduction in communities in contiguous regions.Publication Estimating Trade Flows, Describing Trade Relationships, and Identifying Barriers to Cross-Border Trade Between Cameroon and Nigeria(Washington, DC, 2013-05-07)Cameroon and Nigeria share a common border of nearly 1,700km and both countries have strong historical and cultural ties. However, the partnership between the two countries has had its difficult periods, most recently when the relationship turned hostile over the disputed Bakassi Peninsula, and economic linkages between the economies remain limited. Expanding trade between the two countries could play a critical role in accelerating economic development and regional integration by opening up new markets for producers, and allowing them to benefit from economies of scale. This will require reducing barriers to cross-border trade, allowing increased trade flows to reach the larger market, and permitting private sector producers to increase the scale of their activities. Removing barriers to trade between the two neighbors is likely to benefit particularly relatively remote areas of both countries. The study finds that regulatory and security barriers at the border and along the road remain key impediments to trade. The remainder of this report proceeds as follows. Section one describes drivers for cross border trade such as historical relations, economic factors, and the policy environment. The next section describes the reality of trade flows by describing existing trade corridors and estimating current trade flows. Section three describes how goods are actually traded across borders between the two countries, and how different actors are involved. Section four describes the barriers to trade, and identifies which barriers are most important. Section five describes the potential for increasing trade. Section six summarizes the findings and presents prioritized recommendations for policy reform.
Users also downloaded
Showing related downloaded files
Error: Could not load results for 'https://openknowledge.worldbank.org/server/api/item/relateditemlistconfigs/7e32e848-acef-5ade-a86d-354946ee61f0_downloads/itemlist'.