An Anatomy of U.S. Establishments' Trade Linkages in Global Value Chains

Aaron B. Flaaen, Fariha Kamal, Eunhee Lee and Kei-Mu Yi

No 33724, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Global value chains (GVC) are a pervasive feature of modern production but they are hard to measure. Using confidential microdata from the U.S. Census Bureau, we develop comprehensive linkages between U.S. manufacturing establishments’ imports, production, and exports to construct the imported content of exports. We find that for every dollar of exports, imported inputs represent approximately 13 cents in 2002 and 20 cents by 2017. Using a gravity framework, we find that these GVC flows are higher within “round-trip” (input and output market are the same) linkages, regional trade agreements, and multinational firm boundaries. The strong complementarities between input and output markets are muted by proportionality assumptions in global input-output tables. A back-of-the-envelope quantification implies that import tariffs reduce bilateral trade deficits by substantially less when production networks exhibit strong input-output market complementarities.

JEL-codes: F1 F14 O51 (search for similar items in EconPapers)
Date: 2025-04
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Working Paper: An Anatomy of U.S. Establishments’ Trade Linkages in Global Value Chains (2025)
Working Paper: An Anatomy of U.S. Establishments’ Trade Linkages in Global Value Chains (2024)
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