Measuring trade in value added with firm-level data

Arbeitspapier

Global Value Chains have proliferated economic policy debates. Yet a key concept - trade in value added - is likely mismeasured because of sectoral aggregation bias stemming from reliance on inputoutput tables. This paper uses comprehensive firm-level data on both domestic and international transactions to study this bias. We find that sectoral aggregation leads to overstated trade in value added and, correspondingly, understated import content of gross exports. The economic magnitude of the estimated bias varies from moderate to large - at 2-5 p.p. of gross exports for Belgium and 17 p.p. for China. We study how the interplay between within-sector heterogeneities in firm import and export intensities and firm size determine the magnitude of the sectoral aggregation bias.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: NBB Working Paper ; No. 378

Classification and Topics

• Classification: Wirtschaft ; Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts ; Empirical Studies of Trade ; Transactional Relationships; Contracts and Reputation; Networks
• Subject: global value chains ; input-output tables ; aggregation bias

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bems, Rudolfs ; Kikkawa, Ayumu Ken
• Event: Veröffentlichung
• (who): National Bank of Belgium
• (where): Brussels
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/238165
• Last update: 10.03.2025, 11:44 AM CET