The Similarity of Global Value Chains: A Network-Based Measure

Zhen Zhu (), Greg Morrison (), Michelangelo Puliga (), Alessandro Chessa () and Massimo Riccaboni ()
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Zhen Zhu: IMT School for Advanced Studies Lucca
Greg Morrison: IMT School for Advanced Studies Lucca
Michelangelo Puliga: IMT School for Advanced Studies Lucca
Alessandro Chessa: IMT School for Advanced Studies Lucca

No 9/2015, Working Papers from IMT School for Advanced Studies Lucca

Abstract: International trade has been increasingly organized in the form of global value chains (GVCs) where different stages of production are located in different countries. This recent phenomenon has substantial consequences for both trade policy design at the national or regional level and business decision making at the firm level. In this paper, we provide a new method for comparing GVCs across countries and over time. First, we use the World Input-Output Database (WIOD) to construct both the upstream and downstream global value networks, where the nodes are individual sectors in different countries and the links are the value-added contribution relationships. Second, we introduce a network-based measure of node similarity to compare the GVCs between any pair of countries for each sector and each year available in the WIOD. Our networkbased similarity is a better measure for node comparison than the existing ones because it takes into account all the direct and indirect relationships between country-sector pairs, is applicable to both directed and weighted networks with self-loops, and takes into account externally defined node attributes. As a result, our measure of similarity reveals the most intensive interactions among the GVCs across countries and over time. From 1995 to 2011, the average similarity between sectors and countries have clear increasing trends, which are temporarily interrupted by the recent economic crisis. This measure of the similarity of GVCs provides quantitative answers to important questions about dependency, sustainability, risk, and competition in the global production system.

Keywords: Networks; Node Similarity; Input-Output Analysis; Global Value Chains; Vertical Specialization; International Trade (search for similar items in EconPapers)
JEL-codes: C67 F10 F15 (search for similar items in EconPapers)
Pages: 30
Date: 2015-09, Revised 2015-09
New Economics Papers: this item is included in nep-int, nep-net and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in EIC working paper series

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http://eprints.imtlucca.it/2753/1/WP_2015_9.pdf First version, 2015 (application/pdf)

Related works:
Journal Article: The similarity of global value chains: A network-based measure (2018)
Working Paper: The Similarity of Global Value Chains: A Network-Based Measure (2015)
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