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Value Chains: Production Upstreamness and Downstreamness Revisited

Patricio Aroca () and Randall Jackson

No Working Paper 2018-01_R1, Working Papers from Regional Research Institute, West Virginia University

Abstract: Measures devised to quantify value chain position have been used increasingly in recent years. While the constructs underlying these measures are meaningful, this paper identifies an overlooked implementation problem. Proposed algorithms have been applied as though the underlying data represent flows. Implementation data are drawn from modern input-output accounting frameworks that recognize secondary production explicitly. Unadjusted Use matrices are not conventional flows matrices because they do not identify the industries from which commodities originate. We demonstrate logical inconsistencies that arise, provide correct flow matrix formulations for upstreamness and downstreamness measures, and present empirical comparisons of correct and incorrect formulations.

Keywords: Value Chains; Input-output; Upstreamness; Downstreamness (search for similar items in EconPapers)
JEL-codes: F12 D57 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2018-01
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