Measuring Domestic Factor Content in Bilateral and Sectoral-Level Trade Flows

Zhi Wang (), Shang-Jin Wei and Kunfu Zhu

No 30953, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Measuring country origins of factor content in bilateral or sector-level exports is important to understand evolution of regional and global value chains and the roles of individual country-sectors in these chains. This paper proposes a method to distinguish between measures based on backward and forward linkages and between net and gross factor content. It is consistent with the System of National Account Standard and has the adding-up property. In comparison, these properties do not hold for the “hypothetical extraction method” proposed by Los et al. (2016). We show a number of examples involving disaggregated trade in which the two methods diverge.

JEL-codes: F10 (search for similar items in EconPapers)
Date: 2023-02
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