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  3. American Economic Review
  4. February 2014
  5. Tracing Value-Added and Double Counting in Gross Exports

Tracing Value-Added and Double Counting in Gross Exports

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Abstract

This paper proposes an accounting framework that breaks up a country's gross exports into various value-added components by source and additional double-counted terms. Our parsimonious framework bridges a gap between official trade statistics (in gross value terms) and national accounts (in value-added terms), and integrates all previous measures of vertical specialization and value-added trade in the literature into a unified framework. To illustrate the potential of such a method, we present a number of applications including re-computing revealed comparative advantages and the magnifying impact of multi-stage production on trade costs.

Citation

Koopman, Robert, Zhi Wang, and Shang-Jin Wei. 2014. "Tracing Value-Added and Double Counting in Gross Exports." American Economic Review, 104 (2): 459-94. DOI: 10.1257/aer.104.2.459

Additional Materials

JEL Classification

  • E01 Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
  • E16 General Aggregative Models: Social Accounting Matrix
  • F14 Empirical Studies of Trade
  • F23 Multinational Firms; International Business
  • L14 Transactional Relationships; Contracts and Reputation; Networks