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2014/SOM2/CTI/DIA3/005
Development of Trade in Value-Added Indicators Using Global Input-Output Model
Submitted by: OECD
Public-Private Dialogue on Building Asia Pacific Partnership Through Global
Value Chains Collaboration Qingdao, China
12 May 2014
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DEVELOPMENT OF TRADE IN
VALUE-ADDED INDICATORS USING
GLOBAL INPUT-OUTPUT MODEL
Norihiko YAMANO
OECD Directorate for Science, Technology and Industry
APEC Public-Private Dialogue on Building Asia Pacific Partnership through Global Value Chains CollaborationQingdao, 12 May 2014
• Jan 2012: OECD-WTO TiVA concept note• Apr 2012: TiVA project is announced by SG at G20• Sep 2012: Preliminary estimates are presented at high level
conference in Beijing• Jan 2013: Launch of Database: Indicators for 40 countries;
18 industries; 2005, 2008, 2009; 17 economy notes• May 2013: OECD Ministerial meeting. First revision:
Indicators for 56 economies; 18 industries; 1995, 2000, 2005, 2008, 2009; 40 economy notes
• May 2014: OECD/G20 GVC Workshop. Extensions
Background: What we developed under TiVA project
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• Autarky
• Final goods trade (pre-globalised world*)
• (steam revolution, 1st unbundling*)
• Vertical specialisation (intermediate imports for exporting activity)
• Fragmentation of production stages
(ICT revolution, 2nd unbundling*)
• Distance and borders (regions) still matters
A brief history of globalisation of production networks
* Baldwin 3
Export by sector (1995,2009)
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Source: OECD Inter-country I-O (May 2013)
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Export by sector (2009)
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Source: OECD Inter-country I-O (May 2013)
• Trade dependency – (Export+Import)/GDP
– Net exports /GDP
• Offshoring and import contents of exports
• Bilateral trade relationship (intra-industry, end-use trade patterns)
• Various trade flow analyses (gravity equations)
A brief history of globalisation indicators using Industrial databases
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• Interconnectedness
• Alternative presentation of trade relationship across countries
• Direct and indirect economic effects of trade
What is TiVA?
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economy and industry/product dimensions
Economy- VA source economy- Exporting economy- Importing economy- Final expenditure economy
Industry / Product- VA source industry- Products form exporting
industry- Importing industry- Final expenditure products
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Value-added embodied in exports
Domestic VA(Direct)
Domestic VA(Indirect)
Foreign VA
Re-importedDomestic VA
Export ForeignIndustry
and Households
Import partners
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Value-added embodied in gross exports
Value-added embodied in foreign final demand
Domestic VA(Direct)
Foreign VA
Direct exports ForeignCustomers
(final consumption)
Domestic VA(Indirect)
Production networks
abroad
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Value-added embodied in foreign final demand
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Core of the TiVA database is an economic model based on Inter-country Input-Output table (ICIO).These ICIO models allow us to analyse- Intermediate trade flows of goods and services- Harmonised (mirror) bilateral trade balances- Sectoral GDP and output at global level- Value-added contents by source economy and industry of
additional unit demand (exports and domestic demand)- Consumption and investment activity by type of goods
and services
Methodology
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• Collection of data sources• Harmonisation of main aggregate
components of National Accounts• Harmonisation of national I-O• Adjustment of bilateral trade coefficient• Development of ICIO• Indicator calculations• Dissemination
Development flow: Inter-country I-O and indicators (TiVA)
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• Institutional long-term
• Official I-O data used for all countries
• Benchmarked to National Accounts (exports, imports and value-added)
• Benchmarked to Balance of Payment
• Allocation trade by end-use categories
• Re-exports adjustment
• Rest of the world (closed model)
OECD ICIO development approach
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Using and Interpreting TiVA data
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High foreign content share of exports: lower value-added? lower productivity? and lower skills? Fewer jobs?
Source: OECD-WTO Trade in Value-Added database
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16 / 57
Domestic VA share in gross exports (China, 1995)
1995: 141 USD Billion
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17 / 57
Domestic VA share in gross exports (China, 2008)
2008: 1527 USD Billion
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Gross exports, China 1995-2008
1995: 141 USD Billion
2008: 1527 USD Billion
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How many jobs sustained by foreign final demand
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0
10
20
30
40
50
60
70
Kore
a Re
p.
Chin
a
Russ
ian
Fed.
Mex
ico
Indo
nesia
Japa
n
Aust
ralia
Uni
ted
Stat
es
% 2008 1995
Selected APEC economiesSource: OECD, Science, Technology and Industry Scoreboard, 2013
0
10
20
30
40
50
60
%EU27 NAFTA East and Southeast Asia China Other
Source: OECD, Science, Technology and Industry Scoreboard, 2013
Foreign value added in household consumption, by source region, 2009
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• Data and Model– Industry details
– Procurement of imported goods are assumed to be proportional for all sectors
– Rest of the world (more developing economies)
– Heterogeneity within a economy (e.g. different production system of exporters and non-exporters)
• TiVA Indicator Calculation– Better presentation and dissemination tools
– Region-to-Region rather than economy-to-economy
Caveats – rooms for improvements
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• Harmonisation issues of SNA and National IO/SUT
• Price valuation (producers’price / basic price)
• Relationship between imported goods and trade related services
• Non-resident expenditures
… Trade balancing issues
General data issues
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• Imports in f.o.b. price in addition to c.i.f.
• Reconciliations of bilateral trade positions
• Balance of payment in goods by sector and by partner
• Heterogeneity within a industry in a economy: firm size, exporting firm, foreign owned and export processing zone, etc
What can countries do to improve quality
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Asian Pacific countries specific issues
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• Trade balancing issues
• Bilateral trade partner shares
• Relationship between imported goods and trade related services
• National I-O tables are not published for all years. More sources required for better quality
ICIO compilation issues
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• Expanding countries and more detail industry level• Quality enhancement
– Introducing better balancing techniques– Estimates based on annual supply-use tables– Sectoral value-added and gross output
• Format– SNA2008 , ISIC Rev4 based sector
• Underlying ICIO model dissemination• Improved dissemination tools• More indicators
Future extensions (short & medium term)
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• Indirect effects • Technological coefficient • Global Value Chain • Production stages • Propagation and Length• Distance to consumers• Comparative Advantage • Participation
Terminology to Avoid (or Use with Care) as indicator names
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• TiVA http://oe.cd/tiva• OECD.Stathttp://stats.oecd.org/Index.aspx?DataSetCode=TIVA_OECD_WTO
http://stats.oecd.org/Index.aspx?DataSetCode=TIVAORIGINVA
• Global value chainshttp://www.oecd.org/sti/ind/global-value-chains.htm
• Carbon footprinthttp://www.oecd.org/sti/inputoutput/co2
• Jobs sustained and consumption behaviour indicators, Scoreboard 2013, OECD (Chapter Participating in the global economy)
http://www.oecd-ilibrary.org/science-and-technology/oecd-science-technology-and-industry-scoreboard-2013_sti_scoreboard-2013-en
How to access TiVA database and related ICIO analyses
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Appendix
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Data sourcesSupply-use and Input-Output tables (National sources/ Eurostat / Asian Dev Bank)
Bilateral trade statistics for goods and services (OECD / UN)
Economy submitted National Accounts (OECD / UN)
Balance of Payments (National source / IMF)
Intermediate analytical data products at OECDHarmonised symmetric Input-Output tables (OECD I-O)
Bilateral Trade Database by Industry and by End-use for goods (BTDIxE)
Sectoral Value-Added (STAN)
Harmonised Bilateral Trade in Services (OECD-WTO)
Adjusted National Accounts (currency, discrepancy and re-exports)
Components of Inter-country I-OUpdate estimates for missing tables for reference years
Reconciliation of I-O and BTD figures with National Accounts
Estimated Bilateral Trade in Services by Industry(EBTSI)
Data sources for OECD Inter-country inter-industry model
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Indicator CodeGross exports (GBR to USA) EXGR
GBR (VA) GBR (exports) World EXGR_DVA
GBR (VA) Consumption in foreign countries (e.g.DEU)
FDDVA
Foreign VA embodied in imports (e.g.FRA) GBR(exports) World
FVA_EXGR
Intermediate imports GBR (exports) World to total intermediate imports ratio
REI
Domestic VA embodied in imports GBR EXGR_RIM
Relative sectoral shares (RCAs) RCA
TiVA Indicator groups
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OECD All OECD 34 countries
BRIICSBrazil, China, India, Indonesia, RussianFederation, South Africa
Other EU27Bulgaria, Cyprus, Latvia, Lithuania, Malta, Romania
Other G20 Argentina, Saudi Arabia
Other South Eastern Asia
Brunei Darussalam, Cambodia, Malaysia, Philippines, Singapore, Thailand, Viet Nam
Other Eastern Asia Chinese Taipei, Hong Kong ChinaOther Rest of the World
Coverage
57 economies + RoW , 1995- 2009
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Industry
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