A proportionality assumption and measurement biases in the factor content of trade

Puzzello, Laura

doi:10.1016/j.jinteco.2011.11.009

Cited by 43 publications

(28 citation statements)

References 12 publications

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“…However, no countries (to our knowledge) directly collect information on bilateral sources of inputs used in particular sectors. 31 Puzzello (2010) compares factor content calculations with and without the proportionality assumption using IDE-JETRO regional input-output tables for Asia. Koopman et al (2010) compute value added content using disaggregate data classified under the BEC system to estimate bilateral intermediate goods flows.…”

Section: Multilateral Value Added Exportsmentioning

confidence: 99%

Accounting for intermediates: Production sharing and trade in value added

Johnson

Noguera²

2012

Journal of International Economics

1,305

980

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JEL classification: F1 C67 D57 R15We combine input-output and bilateral trade data to compute the value added content of bilateral trade. The ratio of value added to gross exports (VAX ratio) is a measure of the intensity of production sharing. Across countries, export composition drives VAX ratios, with exporters of Manufactures having lower ratios. Across sectors, the VAX ratio for Manufactures is low relative to Services, primarily because Services are used as an intermediate to produce manufacturing exports. Across bilateral partners, VAX ratios vary widely and contain information on both bilateral and triangular production chains. We document specifically that bilateral production linkages, not variation in the composition of exports, drive variation in bilateral VAX ratios. Finally, bilateral imbalances measured in value added differ from gross trade imbalances. Most prominently, the U.S.-China imbalance in 2004 is 30-40% smaller when measured in value added.

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Section: Multilateral Value Added Exportsmentioning

confidence: 99%

Accounting for intermediates: Production sharing and trade in value added

Johnson

Noguera²

2012

Journal of International Economics

1,305

980

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“…In select empirical exercises, where we investigate source country characteristics (related to labour-market institutions), we therefore need to impose a country-level proportionality assumption (similar to Reimer 2006;Trefler and Zhu 2010): if one-third of the German absorption of electronics is sourced from China, for instance, then we impose that one-third of any German industry's use of electronics originates from China. Puzzello (2012) documents for trade flows in East Asia, where industry-level bilateral trade data is available separately for input and final use, that the net effect of the country-level proportionality assumption on measured factor trade is small. We translate the reported import values in the early years from Deutsche Mark to Euro and deflate all years with the German CPI to our base year 1998.…”

Section: Imports Of Intermediate Inputsmentioning

confidence: 99%

Trade and Tasks: An Exploration over Three Decades in Germany

Becker

Muendler

2014

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"what" activities, the "how" performance requirements exhibit no evidence of additional multitasking over time. Workers remain similarly focused in an average of around 5 (out of 9) performance requirements throughout the sample period. This evidence suggests that faster workplace change is to be expected in performance dimensions beyond codifiability or routineness. 3 Combined with sector-level trade information, our worker-reported task data provide evidence on the responsiveness of onshore tasks to trade flows and thereby indicate the degree of offshorability or tradability of jobs (Jensen and Kletzer 2010;Blinder 2009). Using the import matrix from the German input-output tables, we can separate imports of intermediate inputs from final-goods imports by year and sector of origin. The German statistical agency does not place the common assumption of proportionality with domestic inputs on the import matrix, rendering the information on imports of intermediate inputs more precise than that available for several other OECD countries. Imports of intermediate inputs are commonly associated with offshoring. We combine the information on import uses with publicly available data on merchandise trade flows to and from Germany and construct novel bilateral services trade flows using data at Deutsche Bundesbank. The bilateral nature of those comprehensive trade data allows us to relate trade flows to the composition of labour-market characteristics of the foreign countries, where German imports originate, while controlling for German exports. To return to the example of tele-medicine, offshoring can run in both directions. While radiologists in high-income countries might be susceptible to foreign competition, other specialties might export medical services. The Cleveland Clinic, a leading hospital in the United States, provides tele-oncology to Rwanda.Four main facts emerge from our German data. First, intermediate inputs constitute a major share of imports and dominate trade flows throughout the sample period. Second, the German workforce increasingly specializes in workplace activities and performance requirements that are typically considered non-offshorable, mainly within and not between sectors and occupations. Third, we weight sectoral import flows to Germany with typical German task content seven years prior in an imputation exercise, and use similar regressions to describe the evolution of task trade. We find that the imputed activity and job requirement content of German imports grows relatively more intensive in work characteristics typically considered offshorable. To investigate the susceptibility of tasks to offshoring, we relate tasks to trade flows in regressions and find that task responses to intermediate-input offshoring are similar to the same tasks' responses to exports from Germany, but typically respond in the reverse way to final-use imports. For example, German workers specialize more in research activities and computer programming in response to both more intermediate-input imports and more...

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“…) is the share of labor in value added, which is a measure of labor intensity in the trade literature such as Puzzello (2010). With this production function, the marginal cost is the following:…”

Section: Goods Pricesmentioning

confidence: 99%

Competition, Labor Intensity, and Specialization: Structural Changes in Postcrisis Asia

Jinjarak

Naknoi²

2011

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The views expressed in this paper are those of the author(s) and do not necessarily reflect the views or policies of the Asian Development Bank. Terms of use: Documents inThe ADB Economics Working Paper Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the Asian Development Bank (ADB) staff, consultants, or resource persons. The series deals with key economic and development problems, particularly those facing the Asia and Pacific region; as well as conceptual, analytical, or methodological issues relating to project/program economic analysis, and statistical data and measurement. The series aims to enhance the knowledge on Asia's development and policy challenges; strengthen analytical rigor and quality of ADB's country partnership strategies, and its subregional and country operations; and improve the quality and availability of statistical data and development indicators for monitoring development effectiveness.

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A proportionality assumption and measurement biases in the factor content of trade

Cited by 43 publications

References 12 publications

Accounting for intermediates: Production sharing and trade in value added

Accounting for intermediates: Production sharing and trade in value added

Trade and Tasks: An Exploration over Three Decades in Germany

Competition, Labor Intensity, and Specialization: Structural Changes in Postcrisis Asia

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