The Great Collapse in Value Added Trade

Arne Nagengast and Robert Stehrer

No 112, wiiw Working Papers from The Vienna Institute for International Economic Studies, wiiw

Abstract: This paper studies the great collapse in value added trade using a structural decomposition analysis. We show that changes in vertical specialisation accounted for almost half of the great trade collapse, while the previous literature on gross trade has mainly focused on final expenditure, inventory adjustment and adverse credit supply conditions. The decline in international production sharing during the crisis may partially account for the observed decrease in global trade elasticities in recent years. Second, we find that the drop in the overall level of demand accounted for roughly a quarter of the decline in value added exports while just under one third was due to compositional changes in final demand. Finally, we demonstrate that the dichotomy between services and manufacturing sectors observed in gross exports during the great trade collapse is not apparent in value added trade data.

Keywords: great trade collapse; vertical specialisation; trade in value added; input-output tables; structural decomposition analysis (search for similar items in EconPapers)
JEL-codes: C67 F1 F2 R15 (search for similar items in EconPapers)
Pages: 22 pages including 7 Tables and 3 Figures
Date: 2015-04
New Economics Papers: this item is included in nep-hme and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as wiiw Working Paper

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Related works:
Journal Article: The Great Collapse in Value Added Trade (2016)
Working Paper: The great collapse in value added trade (2015)
Working Paper: The great collapse in value added trade (2015)
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