Table 8 - uploaded by Neil Foster-McGregor
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Based on recent approaches to measuring the factor content of trade when intermediates are traded we decompose value added trade and its components (capital and labor, as well as their subcomponents ICT and Non-ICT capital and educational attainment categories) distinguishing between various categories of domestic value added content of exports and...
Context in source publication
Context 1
... we present in Table 8 the results when splitting up trade flows in labor terms into the components high-educated and medium and low educated taken together. The first interesting point here is that the EU-15 is a net importer of high-educated labor (and increasingly so) whereas the US is maintaining its position in being a net exporter of high-educated labor though again with the trade surplus declining over time. ...
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Citations
... Analysis of value added trade is based on the use of input-output tables which, while sacrificing the specificity of using customs classifications on parts or components, allow tracking usage explicitly at a sectorally disaggregated level and differentiating between transactions that are intermediates and those consumed as final demand by firms, governments, or consumers. This has been central to a recent proliferation of studies examining the development of value added in production and trade, starting with Hummels et al. (2001) and more recently elaborated by Koopman et al. (2010), Foster et al. (2011, and Johnson and Noguera (2012), among others. 2 ...
... Given that data on intermediate goods trade flows is not directly available, tracking trade in intermediate goods takes different approaches. One of them consists in using Input-Output tables that keep record of the imported intermediate inputs used in production (Hummels et al., 2001;Feenstra et al., 2009;Foster et al.,2011;Johnson and Noguera, 2011). Other methods use indicators to identify whether trade within an industry is vertical or horizontal in nature (Fukao et al., 2003;Ando, 2006;Turkan and Ates, 2011), or employ data on processing imports (Feenstra et al., 1999;Baldone et al., 2001). ...
Current debates presume that devaluation of one country's currency may transfer the production of imported intermediate goods to the devaluating country. This paper argues that in a global production network involving more than two countries in the production of fragments, this presumption may not hold. With a simple Ricardian model of fragmentation, this paper shows that the production of fragments can be transferred only if countries have close comparative advantage. Using data from the World Input Output Database, our model is found to be empirically supported.
