Modelling global value chains: From trade costs to policy impacts

Abstract

The growth of world trade in the 1990s and 2000s has been notable for the important role played by intermediate goods. Data from the Asian Development Bank's Multi-Region Input-Output Table (MRIO) show that the proportion of intermediates in total goods exports for the 63 countries (including an aggregate rest of the world) in the database rose from 62.1% in 2000 to 69.2% in 2019. Intensive trade in intermediates is consistent with an increase in global and regional production sharing, often used in the policy literature as an observable proxy for integration into

Trade Policy and African Participation in Global Value Chains: Does Trade Facilitation Matter?

“…Moreover, they argue that good infrastructure can help an economy, especially a less developed one, to reap the benefits of participating in global value chains to improve its economic structure. Finally, Shepherd (2022) has shown that observed changes in trade facilitation performance between 2015 and 2019 have strong explanatory power for observed changes in GVC trade over the same period.…”

“…Those work can be classified into two categories. On the one hand, we have studies that have focused on trade in intermediate goods (Hummels et al, 2001;Hillberry and Hummels, 2002;Yi, 2003;Ma an Van Assche, 2010;Saslavsky and Shepherd, 2014); on the other hand, we have studies that have focused on trade in value added (Moïsé, and Sorescu, 2015;Kowalski et al, 2015;Del Prete et al, 2018;Johnson and Noguera, 2012;Shepherd, 2017;Shepherd, 2022).…”

“…The second category of studies have focused on value-added trade to capture participation in GVCs (Moïsé and Sorescu, 2015;Kowalski et al, 2015 ;Del Prete et al, 2018 ;Johnson and Noguera, 2012 ;Shepherd, 2017 ;Shepherd, 2022). For example, Moïsé and Sorescu (2015) study in the OECD showed that trade facilitation measures have a strong impact on value-added indicators.…”

What's the influence of input's variation? Estimating the input elasticity in the global value chain

“…To quantify the input variation, the notion of input elasticity is the most widely used method because it reflects single inputs' variation relative to the change of the entire input demand system (Egger et al., 2021; Shepherd, 2022; Zhou & Fan, 2022). In the GVC, the stochastic input demand system absorbs the input and employs them for subsistence and bliss with a stochastic share.…”

Trade costs and tax transition reform in developing countries

“…It is worth noting that this definition of 'tax transition reform' does not imply that the optimal reform of domestic taxation (through tax rates and tax bases design) in developing countries should be the same as that of developed countries. We are mainly interested in the shifts in the tax revenue structure in favour of domestic tax revenue, regardless of the nature of domestic taxation reform in developing countries.8 See for example,Anderson and Marcouiller (2002);Ali and Milner (2016);Arvis et al (2010);Diakantoni et al (2017);Hoekman and Nicita (2011);Hoekman and Shepherd (2015);Jacks et al (2008Jacks et al ( , 2011;Novy (2013);Shepherd (2022) andWTO (2021). A literature review on the trade effects of trade facilitation could be found inBeverelli et al (2015).…”