Measurement and Determinants of Trade in Value Added

Nakgyoon Choi ()
Additional contact information
Nakgyoon Choi: Korea Institute for International Economic Policy

No 13-1, Working Papers from Korea Institute for International Economic Policy

Abstract: This study measures the trade in value added using the World Input Output Tables and the socio-economic accounts of 40 countries and 35 industries from 1996 to 2009. Specifically, this study analyzes the effects of trade on the value added, based on Meng et al. (2006), WTO and IDE-JETRO (2011), Stehrer (2012), Stehrer et al. (2012). The measurement results indicate that export and import values in value added turned out to be smaller than the values in gross value. However, the trade balance in terms of value added does not necessarily shrink compared to the bilateral trade balance in terms of gross value. This study also investigates the determinants of trade in value added, incorporating the gravity model, the Heckscher-Ohlin model, and the Ricardian model. When we use the data on trade in value added, the explanatory power of the gravity model turned out to be relatively small compared to the pooled data on trade in gross value, but that of the Heckscher-Ohlin model turned out to be stronger while the Ricardian model revealed mixed results. Interestingly in our investigations, the elasticities of the Heckscher-Ohlin as well as the Ricardian parameters have been increasing while that of the gravity model has remained stable during the period 1996-2009. This result implies that trade patterns can be better explained by factor endowment and technological differences during the 2000s compared to the 1990s.

Keywords: Trade In Value Added; Determinants Of Trade In Value Added (search for similar items in EconPapers)
JEL-codes: F10 F11 F40 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2013-04-10
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://dx.doi.org/10.2139/ssrn.2317706 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwp:2013_001

Access Statistics for this paper

More papers in Working Papers from Korea Institute for International Economic Policy [30147] 3rd Floor Building C Sejong National Research Complex 370 Sicheong-daero Sejong-si, Korea. Contact information at EDIRC.
Bibliographic data for series maintained by Juwon Seo ( this e-mail address is bad, please contact ).