Estimating domestic content in exports when processing trade is pervasive

Robert Koopman, Zhi Wang () and Shang-Jin Wei

Journal of Development Economics, 2012, vol. 99, issue 1, 178-189

Abstract: For many questions, it is crucial to know the extent of domestic value added (DVA) in a country's exports, but the computation is more complicated when processing trade is pervasive. We propose a method for computing domestic and foreign contents that allows for processing trade. By applying our framework to Chinese data, we estimate that the share of domestic content in its manufactured exports was about 50% before China's WTO membership, and has risen to nearly 60% since then. There are also interesting variations across sectors. Those sectors that are likely labeled as relatively sophisticated such as electronic devices have particularly low domestic content (about 30% or less).

Keywords: Domestic content; Foreign content; Processing exports; Duty drawback; Vertical specialization; Global production chains; Chinese economy (search for similar items in EconPapers)
JEL-codes: C67 C82 F1 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (284)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:99:y:2012:i:1:p:178-189

DOI: 10.1016/j.jdeveco.2011.12.004

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