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Tracing value-added and double counting in sales of foreign affiliates and domestic-owned companies

Sebastien Miroudot () and Ming Ye

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we propose a new accounting framework for the decomposition of value-added into domestic, foreign and double counting terms in domestic sales. In this framework, we show where the value-added double counting is derived from and give an explicit expression of domestic and foreign double counting terms based on the Inter-Country Input-Output (ICIO) tables’ Ghosh insight. We can distinguish domestic sales from exports and trace the value added and double counting in sales of foreign affiliates and domestic-owned enterprises. Based on this framework, we then calculate the value-added by foreign-owned and domestic-owned firms in exports and in domestic sales by using an Inter-Country Input-Output table split according to ownership. Preliminary results suggest that there is much more double counting in sales of foreign affiliates than in exports and that more value-added is created through exports than through sales of foreign affiliates in world GDP.

Keywords: inter-country input-output; value-added decomposition; global value chains; foreign affiliates (search for similar items in EconPapers)
JEL-codes: E01 E16 F23 L14 (search for similar items in EconPapers)
Date: 2018-03-14
New Economics Papers: this item is included in nep-acc, nep-int and nep-mac
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