Collateral Imbalances in Intra-European Trade?

Arne Nagengast and Robert Stehrer

No 107, wiiw Working Papers from The Vienna Institute for International Economic Studies, wiiw

Abstract: Abstract One of the main stylised facts that has emerged from the recent literature on global value chains is that bilateral trade imbalances in gross terms can differ substantially from those measured in value added terms. However, the factors underlying the extent and sign of the differences between the two measures have so far not been investigated. Here, we propose a novel decomposition of bilateral gross trade balances that accounts for the differences between gross and value added concepts. The bilateral analysis contributes conceptually to the literature on double counting in trade by identifying the trade flow in which value added is actually recorded for the first time in international trade statistics. We apply our decomposition framework to the development of intra-EU-27 trade balances from 1995-2011 and show that a growing share of intra-EU bilateral trade balances is due to demand in countries other than the two direct trading partners.

Keywords: trade balances; global value chains; vertical specialisation; value added; input-output tables (search for similar items in EconPapers)
JEL-codes: C67 F1 F2 R15 (search for similar items in EconPapers)
Pages: 41 pages including 6 Tables and 9 Figures
Date: 2014-07
New Economics Papers: this item is included in nep-eec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published as wiiw Working Paper

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Related works:
Journal Article: Accounting for the Differences Between Gross and Value Added Trade Balances (2016)
Working Paper: Collateral imbalances in intra-european trade? Accounting for the difference between gross and value added trade balances (2014)
Working Paper: Collateral imbalances in intra-European trade? Accounting for the differences between gross and value added trade balances (2014)
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