Global Value Chain Participation And Recent Global .
Global Value Chain Participation and Recent Global Business CycleZhi WangUniversity of International Business and Economics & George Mason UniversityShang-Jin WeiColumbia UniversityXinding Yu and Kunfu ZhuUniversity of International Business and Economics, ChinaFebruary 2017AbstractIn this paper, we propose a production activity decomposition framework to distinguishGVC and non-GVC activities in GDP and final goods production based on whether theycross national borders for production or not, and then redefine the measures of forwardand backward industrial linkage based GVC participation indexes. We apply thisdecomposition framework to the newly available Global Input-Output Database (WIOD)that cover 44 countries and 56 industries to show the advantages of our new GVCparticipation measures, as well as to quantitatively characterize the cross-countryproduction sharing patterns. The econometric analysis based on the numerical resultscontribute to a better understanding of the relationship between different types of valueadded production activities and economic growth.Key Words: Global Value Chain (GVC), Participation Index, Economic GrowthJEL Number: F1, F61
1. IntroductionThe emergence of global value chains (GVCs) has changed the patterns ofinternational trade in recent decades. Different stages of production now are oftenconducted by multiple producers located in several countries, with parts and componentscrossing national borders multiple times. While the deficiency (i.e., due to trade inintermediates) of official trade statistics as a description of true trade patterns has beenwell recognized, measures of global value chains based on sequential production are stillunder development.As GVC involves products and services that will be used as inputs for productionprocesses that cross national borders, the first major issue to be solved in GVCmeasurement is the missing information on final or intermediate usage in Customs tradestatistics. However, hundreds and thousands of products are classified by Customsproduct codes (such as the 10-digit Harmonized Tariff Schedule (HS) in the US), andowing to the tremendous heterogeneity even within the 10-digit HS product groups.Properly identifying their final usage is not an easy task. Furthermore, supply chain tradeor cross-border production-sharing measures in the literature, such as “verticalspecialization” (VS) proposed by Hummels et al. (2001) or “import to produce” (I2P) and“import to export” (I2E) proposed by Baldwin and Lopez (2013), are recursive conceptsand double counting is pervasive.To overcome these difficulties in GVC measurement, “factor content,” or “valueadded” trade, is emerging as the mainstream measures of cross-border production-sharingactivities as production factors are limited, such as land, labor, capital, etc., thus are easyto classify. Therefore, we can classify production activities based on factor contentembodied in various products according to some uniform standard to make analyticalwork tractable. In the classical trade model, factors are not mobile across countries, butfactor content embodied in final products does cross national borders, although it is onlyfor consumption. In today’s world economy dominated by regional and GVCs, somefactors (e.g., capital) are more mobile internationally while some are less mobile (e.g.,labor). Some factors directly cross national borders, such as FDI, but a large portion ofproduction factors still do not directly cross national borders; instead, they continue toembody in both final and intermediate trade flows across national borders.2
In this paper, we propose a production activity decomposition framework accordingto the System of National Accounts standard (SNA), classifying these embedded factorcontent into GVC and non-GVC activities based on whether they cross national bordersfor production or not (FDI was excluded for future work). Value-added creation is onlyclassified as GVC activities when embodied factor content crosses national border forproduction purposes. Domestic input-output coefficient matrix and import input-outputcoefficient matrix in an inter-country input-output (ICIO) table are used to distinguishdomestic and foreign factor content in various production activities.We integrate the forward and backward cross-country, inter-industry linkages baseddecomposition into one unified mathematical framework. The forward linkage-baseddecomposition views a country/sector’s engagement in GVC activities from theproducer’s perspective. It classifies the portion of GDP created in a country/sector bydomestic production factor content that cross border at least once as GVC productionactivities, and the portion of GDP created by domestic factor content stay within thenational border in the whole production process as domestic production activities. Itdecomposes values but not for particular products as any contemporary product is verylikely to contain some foreign factor content or value added, directly or indirectly.However, these values are measured by GDP decomposition for foreign countries, ormeasured by backward-linkage based decomposition of a country/sector’s final goodsproduction, as one country’s domestic value added embedded in its exports that are usedby another country to produce exports will become foreign value added in that country’sexports. In other words, the backward linkage-based decomposition considers acountry/sector’s engagement in GVC activities from the buyer’s perspective. It traces allprimary factor inputs embodied in the final products to its original country/sector sourcesand consistently classifies this embodied domestic or/and foreign factor content intoGVC and non-GVC production activities based on whether they have crossed nationalborders for production or not.We show the advantages of the GVC participation measures build on such aproduction activity accounting framework over these traditional GVC participationindexes based on gross exports, and conduct econometric analysis to establish the3
empirical evidence that how economies to engage in different value-added creationactivities to impact their economic performance first time in the literature.Rest of the paper is organized as follows: Section 2 describe how GVC and NonGVC activities are classified in our GDP and final goods production accountingframework and define the new GVC participation indexes; Section 3 presents numericalresults when apply our decomposition to the newly available Global Input-outputdatabase that cover 44 countries and 56 industries and demonstrate the advantages of ournewly defined GVC participation indexes over these indexes used in current literature;section 4 reports our econometric analysis that establish the relationship betweendifferent types of value-added production activities with economic growth and section 5concludes.2. Production Activity Accounting and Global Value Chain Participation Indexes2.1 The setup of production activity accounting frameworkWithout loss generality, let’s consider an Inter-Country Input-Output (ICIO) modelfor G countries and N sectors. Its structure can be described by Table 1:Table 1 General Inter-Country Input-Output tableOutputsIntermediate UseFinal Demand12 G12 GTotalOutput1𝑍11𝑍12 𝑍1𝑔𝑌11𝑌12 𝑌1𝑔𝑋12𝑍 21𝑍 22 𝑍 2𝑔𝑌 21𝑌 22 𝑌 2𝑔𝑋2 G𝑍𝑔1𝑍𝑔2 𝑍𝑔𝑔𝑌𝑔1𝑌𝑔2 𝑌𝑔𝑔𝑋𝑔Value-added𝑉𝑎1𝑉𝑎2 𝑉𝑎 𝑔Total input(𝑋1 )′(𝑋 2 )′ (𝑋𝑔 )′InputsIntermediateInputswhere Zsr is an N N matrix of intermediate input flows that are produced in country s andused in country r; Ysr is an N 1 vector giving final products produced in country s andconsumed in country r; Xs is also an N 1 vector giving gross outputs in country s; andVAs denotes a 1 N vector of direct value added in country s. In this ICIO model, the input4
coefficient matrix can be defined as 𝐴 𝑍𝑋̂ 1 , where 𝑋̂ denotes a diagonal matrix withthe output vector X in its diagonal. The value added coefficient vector can be defined as𝑉 𝑉𝑎𝑋̂ 1 . Gross outputs X can be split into intermediate and final products, 𝐴𝑋 𝑌 𝑋. Rearranging terms, we can reach the classical Leontief (1936) equation, 𝑋 𝐵𝑌,where 𝐵 (𝐼 𝐴) 1 is the well-known (global) Leontief inverse matrix.The gross output production and use balance, or the row balance condition of theICIO table in Table 1 can be written as:𝑋 𝐴𝑋 𝑌 𝐴𝐷 𝑋 𝑌 𝐷 𝐴𝐹 𝑋 𝑌 𝐹 𝐴𝐷 𝑋 𝑌 𝐷 𝐸𝐴11Where 𝐴𝐷 [ 0 00𝐴22 0(1) 0 0 ] is a GN GN diagonal block matrix of 𝑔𝑔 𝐴domestic input coefficient, 𝐴𝐹 is a GN GN off-diagonal block matrix of imported inputcoefficient, 𝐴𝐹 𝐴 𝐴𝐷 , 𝑌 [ 𝐺𝑟 𝑌1𝑟 𝐺𝑟 𝑌 2𝑟final goods and services production, 𝑌 𝐷 [𝑌11 𝐺𝑟 𝑌𝑔𝑟 ]′ is a GN 1 vector of𝑌 22 ′𝑌𝑔𝑔 ] is a GN 1 vector offinal goods and service production for domestic consumption, 𝑌 𝐹 𝑌 𝑌 𝐷 is a GN 1vector of final products exports, 𝐸 [ 𝐺𝑟 1 𝐸1𝑟 𝐺𝑟 2 𝐸 2𝑟 𝐺𝑟 𝐺 𝐸 𝑔𝑟 ]′ is a GN 1vector of gross exports, ′denotes transpose operation.Rearranging equation (1) yields𝑋 (𝐼 𝐴𝐷 ) 1 𝑌 𝐷 (𝐼 𝐴𝐷 ) 1 𝐸 𝐿𝑌 𝐷 𝐿𝐸 𝐿𝑌 𝐷 𝐿𝑌 𝐹 𝐿𝐴𝐹 𝑋(2)where L (𝐼 𝐴D ) 1is defined as local Leontief inverse, a GN by GN diagonal blockmatrix. Pre-multiplying with the GN by GN diagonal matrix 𝑉̂ of direct value-addedcoefficients, replacing X as BY, and further converting the 3 final goods and serviceproduction vectors 𝑌 𝐷 , 𝑌 𝐹 and 𝑌 into GN by GN diagonal matrix 𝑌̂, 𝑌̂ 𝐷 and 𝑌̂ 𝐹 , we canobtain the decomposition of value added and final products production simultaneously asfollowing:𝑉̂ 𝐵𝑌̂ 𝑉̂ 𝐿𝑌̂ 𝐷 𝑉̂ 𝐿𝑌̂ 𝐹 𝑉̂ 𝐿𝐴𝐹 𝐵𝑌̂ 𝑉̂ 𝐿𝑌̂ 𝐷 𝑉̂ 𝐿𝑌̂ 𝐹 𝑉̂ 𝐿𝐴𝐹 𝐿𝑌̂ 𝐷 𝑉̂ 𝐿𝐴𝐹 (𝐵𝑌̂ 𝐿𝑌̂ 𝐷 )(3)Each element in the 𝑉̂ 𝐵𝑌̂matrix represents the value added from a source country/sectordirectly or indirectly used in the production of final goods and services in a particular5
𝑠𝑟 𝑟country/sector. The element of row (s, i) and column (r, j) in the matrix, 𝑣𝑖𝑠 𝑏𝑖𝑗𝑦𝑗 , is thetotal value added (direct and indirect) of sector i in country s embodied in the finalproducts produced by sector j of country r. Looking at the matrix along the row yields thedistribution of value added created from one country/sector pair absorbed by final goodsproduced by all country/sectors pairs. Looking at the matrix along the column yields thecontribution of value added from all source country /sectors pairs embodied in finalgoods and services produced by a particular country/sector.The 𝑉̂ 𝐵𝑌̂matrix can be decomposed into four GN by GN matrixes, each representingdomestic value-added generated or foreign value-added used by the industry in itsproduction of final products to satisfy different segments of the global market. Thedecomposition in equation (3) identifies three types of production activities in eachcountry/sector pair as follows:(1) Production of domestically produced and consumed value-added (𝑉̂ 𝐿𝑌̂ 𝐷 ). It isdomestic value added embodied in domestic produced final products to satisfy domesticfinal demand without involving cross border trade such as haircut.(2) Production of value-added embodied in final product exports ( 𝑉̂ 𝐿𝑌̂ 𝐹 ). It isdomestic value added embodied in exports of final goods and services to satisfy foreignfinal demand. These embodied domestic factor content cross national borders forconsumption only, so is similar to traditional “Ricardian” type trade such as “French winein exchange for England cloth”, in the term proposed by Borin and Mancini (2015) 1.(3) Production of value-added embodied in exports/imports of intermediate goodsand services (𝑉̂ 𝐿𝐴𝐹 𝐵𝑌̂ 𝐹 ). It is domestic value-added used in production activities outsidethe source country, and is the contribution of source country’s production factor to crosscountry production sharing activities. It can be further split into two categories2:In Ricard’s time, exports were 100% domestically produced value added, whereas today, many finalproduct exports from a country, foreign value added is always embodied and domestically produced valueadded is only a part of the exports. However, using decomposition method based on input-output statistics,we are still able to compute the portion of “Ricardian trade” analytically.2The production of foreign affiliates may also be considered as a type of GVC activity since currentresidence-based national account rules treat all firms within national borders as domestic firms; therefore,they treat their value added creation as part of domestic GDP production. No inter-country input–output(ICIO) table currently exists to separate production activities between domestic firms and foreign affiliates.Thus, our GDP decomposition method may underestimate GVC production activities.16
3a. Simple cross country production sharing activities (𝑉̂ 𝐿𝐴𝐹 𝐿𝑌̂ 𝐷 ). Domestic or/andforeign value-added cross national border for production only once. Value-addedembodied in intermediate exports/imports that is used by trading partner to produce itsdomestic products and absorbed in the direct importing country. It involves productionactivities in both the home and partner country, but only cross border for production once.There are no indirect exports via third countries or re-exports/re-imports of the sourcecountries’ factor contents. Such as Chinese value-added embodied in its steel exports tothe US and used in US house construction.3b. Complex cross country production sharing activities ( 𝑉̂ 𝐿𝐴𝐹 (𝐵𝑌̂ 𝐿𝑌̂ 𝐷 )) .Domestic or/and foreign value-added embodied in intermediate exports/imports that isused by partner country to produce exports (intermediate or final) for other countries.Factor contents cross border at least twice. It is used by partner country to produceintermediate or final products either re-export to the home countries (such as Appleengineer’s salary embodied in iPhone bought by an American consumer) or re-export toany other countries (such as Japanese value-added embodied in electronic chip installedin China made toy export to the US)3.To make equation (3) more intuitive, let us assume a two-country (home country sand foreign country r) world, in which each country produces products in N differentiatedtradable industries. Then equation (3) can be rewritten as follows in block matrixnotations: Vˆ s LssYˆ ss0 Vˆ s LssYˆ sr0 0Vˆ s Lss Asr LrrYˆ rr VˆBYˆ Vˆ r LrrYˆ rr 0Vˆ r LrrYˆ rs Vˆ r Lrr Ars LssYˆ ss0 0 Vˆ s Lss Asr ( B rsYˆ ss B rrYˆ rs )Vˆ s Lss Asr [( B rr Lrr )Yˆ rr B rsYˆ sr r rr rs ss ss ˆ sssr ˆ rsˆVˆ r Lrr Ars ( B srYˆ rr B ssYˆ sr ) V L A [( B L )Y B Y ](4)The first term of equation (4) is domestic value added production in country s andr directly absorbed by domestically produced final products to satisfy each country’sdomestic final demand, which are domestic production chains without involving crossborder trade. The second term is domestic value added production in country s and rdirectly absorbed by exports of final goods and services to satisfy foreign final demand,This means that term 3b can be further divided into returned domestic value added and foreign valueadded based on their final destinations of absorption. A detailed mathematical derivation and theirrelation with measures exist in the literature is provided in Appendix A.37
which are also part of domestic production chains without involving cross border tradefor production. The third term is the domestic value added embodied in intermediateexports from Country s and r, or foreign value-added embodied in intermediate importsby country r and s, directly absorbed by importers’ domestic final products, which aresimple cross country production sharing activities. The last term is domestic/foreignvalue added embodied in intermediate trade flows between country s and r used by theimporter to produce products absorbed at home or abroad, which are relativelycomplicated cross country production sharing activities. It can be further decomposedinto complex cross country production ultimately absorbed by home country (domesticvalue-added return home, elements in the diagonal) and ultimately absorbed by foreigncountries (foreign value-added re-exports, elements in the off-diagonal).2.2 Decomposition value added and final goods productionSumming up equation (3) along the row direction, we can decompose value-addedgenerated from each industry/country pair (GDP by industry) into four major componentsbased on whether and how they are involved in cross country production sharingactivities:̂BY ̂LY D ̂ LY F ̂ LAF LY D ̂ LAF (BY LY D )Va′ VVVVV(1) V D(2) V RT(3a) V GVC S(5)(3b) V GVC CSumming up equation (3) along the column direction, we can decompose countrysector final goods production into four major components based on whether and howtheir embodied factor content is involved in cross country production sharing activities.𝑌 ′ 𝑉𝐵𝑌̂ 𝑉𝐿𝑌̂ 𝐷 𝑉𝐿𝑌̂ 𝐹 𝑉𝐿𝐴𝐹 𝐿𝑌̂ 𝐷 𝑉𝐿𝐴𝐹 (𝐵𝑌̂ 𝐿𝑌̂ 𝐷 )(1) 𝑌 𝐷(2) 𝑌 𝑅𝑇(3𝑎) 𝑌 𝐺𝑉𝐶 𝑆(6) 4(3𝑏) 𝑌 𝐺𝑉𝐶 𝐶The first term in equations (5) and (6) is domestic value-added embodied indomestically produced final products that satisfy domestic final demand withoutinvolving international trade; we label it as V D and Y D respectively. The second termis domestic value-added embodied in final product exports, we label it as domestic valueadded in traditional trade (V RT and Y RT). These two terms in both equations are Non4A detailed mathematical derivation of equation (5) and (6) and their relations are provided in Appendix B.8
GVC activities, but the terms in equation (6) are sums of value added from all upstreamcountry/industries embodied in the final products in a particular country/sector, the termsin equation (5) are sums of the same country/sector’s domestic value-added used in alldownstream country/industries. Numerically, they only equal each other at countryaggregate, not at the country/sector level. The third term (3a) in both equations are simplecross country production sharing GVC activities, but the term in equation (5) is domesticvalue-added embodied in intermediate exports that is used by trading partner to produceits domestic products and consumed in the direct importing country, while the term inequation (6) is foreign value added from partner countries embodied in the intermediateimports to the home country used in its production of domestically consumed products.Both of them involve production activities in both the home and partner country, but onlycross border for production once, we label them as V-GVC S and Y GVC Srespectively. The fourth term (3b) in both equations are complex GVC activities, but theterm in equation (5) is domestic factor content embodied in intermediate exports that isused by partner country to produce exports (intermediate or final) for other countries,while the term in equation (6) is returned domestic value-added and/or foreign valueadded embodied in intermediate imports used by the home country to produce its finalproducts for domestic use or/and exports, we label them as V GVC C and Y GVC Crespectively. Numerically, 3a and 3b in both equations only equals each other at theglobal level, not at the country/sector and country aggregate level due to indirect trade viaother sectors or third countries.The sum of (2) and (3) in equation (5) equals domestic value-added (GDP) ingross exports (DVA) proposed by Koopman, Wang and Wei (2014). The sum of (3a) and(3b) minus returned domestic value-added in equation (6) equal foreign value-added inthe exporting country’s final goods production (FVA) defined by Los, Timmer and Vries(2015). The downstream decomposition of GDP by industry based on forward linkagebased cross country inter industry linkage can be illustrated as Figure 1a; and thebackward-linkage based upstream decomposition of final goods production can bedepicted as Figure 1b.9
Figure 1a Decomposition of GDP by industry— Which types of production and trade are Global Value Chain activities?A country/sector’s totalValue-added (V)GDP by industry01In production of finalproducts to domesticmarket directly (V D)In production of finalIn production ofexports directlyintermediate exports(V RT)(V GVC) 21Absorbed by direct importerRe-export/re-importSimple GVCsComplex GVCs(V GVC S)(V GVC C)Figure 1b Decompose final goods production by country/sector--Which part of final goods production and trade belong to GVCs?Production of final goodsand services bycountry/sector (Y)(GDP by industry,V)0Domestic VA indomestically used finalproducts (Y D)1Domestic VA in finalexports(Y RT)Domestic and foreignVA in intermediateimports (Y GVC) 21Partner VA in productionof domestic used products(Y GVC S)10In production of exportedproducts(Y GVC C)
Decomposition of value-added and final goods production into GVC and NonGVC activities based on forward or backward cross-country, inter-industry linkage is thefoundation of the GVC participation index we defined in this paper. Both way todecompose production activities in a country/sector pair include four parts: value-addedin Parts 1 and 2 involve no cross country production sharing activities, satisfy domesticand foreign demand respectively. Value-added in Part 2 cross board once, but only forconsumption activities, all value-added embodied in its intermediate inputs come fromdomestic sources, so it can be considered as Ricardo trade in value-added. Value addedin Parts 3 and 4 are embodied in trade of intermediate products: 3a is value-added embedin intermediate products absorbed by direct importers, there is cross board productionactivities, but only within the direct importing country without further re-export/re-importactivities; 3b is value-added cross board at least twice to satisfy domestic and/or foreignfinal demand. These two parts measure GVC production activities. It excludes domesticvalue-added measured by the first two terms in equations (5) and (6) because they areaccomplished completely within the national boundaries, so both of them can be treatedas pure domestic production activities. Equation (5) decomposes how and where acountry's GDP by industry is used by all the downstream country/sectors and is consistentwith the factor content method in international trade literature. Equation (6) traces out aparticular sector’s final products to all its upstream value-added sources, and is consistentwith the GVC case studies in the literature.2.3 Global Value-Chain participation indexesThe amount of Vertical Specialization (measured by both VS and VS1 as proposedby Hummels et al., 2001) as percent of gross exports have been used widely in theliterature as the index to quantify the extent of a country’s participation in global valuechains (Koopman et al., 2010, 2014; OECD, 2013). However, it excludes production tosatisfy domestic final demand (which includes both pure domestic and international traderelated production activities), and by only considering export activities, may not cover allthe possible ways a country could engage in the global production network.Firms in a country/industry can participate in international production sharing in fourways:11
(1) Exporting its domestic value-added in intermediate exports used by othercountries to produce other countries’ domestically consumed final products that shows upas foreign value-added in other countries’ domestically produced final products useddomestically;(2) Exporting its domestic value-added in intermediate exports used by othercountries to produce exports directly or indirectly; it is the source country’s value-addedthat shows up as foreign value-added in other countries’ gross exports;(3) Using other countries’ value-added to produce its gross exports directly orindirectly; it is the other countries’ value-added that shows up as foreign value-added inthe source countries’ gross exports.(4) Using other countries’ value-added to produce its gross output for domestic usedirectly or indirectly; it is the other countries’ value-added that shows up as foreignvalue-added in the source countries’ gross output used domestically.Global value chain participation indexes used in the literature, such as the VS andVS1 as percent of gross exports, only take channels 2 and 3 into consideration, thusexclude a large portion of production activities that satisfies source country’s domesticfinal demand through international production sharing. In addition, using gross exports asthe denominator, the share might be very high for some sectors since it has very littledirect exports (e.g., Mining and Service). In such cases, we may not be able to determinewhether a large index is due to the large numerator or the small denominator and whetherit overestimates GVC participation for a country/sector pair. It is also not able todistinguish participation in simple or complex GVC activities. The former only involvesproduction sharing activities between the exporting and importing country, while the latermeasures more complex sequential production activities across countries.Using the downstream decomposition of value-added generated from eachindustry/country pair (GDP by industry) expressed in equation (5), and the upstreamdecomposition of final goods production expressed in equation (6), we can fully identifyall the four possible ways a country can participant in the global production network andconstruct indexes that helps us to measure the full extent to which production factors areemployed in a particular country-sector involved in the global production process. Such a12
GVC participation index based on forward industrial linkage can be definedmathematically as follows:𝐺𝑉𝐶𝑃𝑡 𝑓 𝑉 𝐺𝑉𝐶𝑉𝑎′ 𝑉 𝐺𝑉𝐶 𝑆𝑉𝑎′ 𝑉 𝐺𝑉𝐶 𝐶𝑉𝑎′(7)The denominator of equation (7) is the value-added generated in production from acountry/sector pair; the numerator is domestic value added of source country embodied inits intermediate exports to the world. So equation (7) gives domestic value-addedgenerated from GVC production activities as a share of total sector value added. Itmeasures the percentage of production factors employed in a country-sector has beencross national border at least once for production activities. It differs from the forwardindustrial linkage based GVC participation index defined in previous literature (VS1 aspercent of gross exports) in two ways: (a) it is based on the value-added concept whileboth VS1 and gross exports are based on the gross concept; (b) it is a production concept,not only trade. It includes domestic value-added embodied in intermediate inputs fromthe exporting country that is directly and indirectly absorbed by its direct trading partners.Therefore, it completely reflects the degree of participation of domestic productionfactors employed in a particular country/sector in cross border production sharingactivities.Based on the upstream decomposition of final goods production we can define GVCparticipation index based on backward industrial linkage as𝐺𝑉𝐶𝑃𝑡 𝐵 𝑌 𝐺𝑉𝐶𝑌′ 𝑌 𝐺𝑉𝐶 𝑆𝑌′ 𝑌 𝐺𝑉𝐶 𝐶𝑌′(8)The first term in (8) gives the portion of direct trading partners’ value-added embodied inhome country’s intermediate imports used to produce final products consumeddomestically as share of final goods produced in the home country. The second term in (8)gives the share of domestic and/or foreign value-added that cross national border at leasttwice in the total value of final products produced in the home country. The global sumof its numerator equals the global sum of the numerator in equation (7).5 Therefore, at theglobal level, the forward and backward industrial linkage based GVC participationindexes equal each other, a similar property of VS and VS1 based GVC participation5The mathematical proof is provided in Appendix C.13
indexes. However, it also differs from the backward industrial linkage based GVCparticipation index defined in previous literature (VS as percent of gross exports) in twoways: (a) it is based on a net concept while both VS and gross exports are based on agross concept; (b) it is a production concept, not only trade. It includes not only foreignvalue-added embodied in intermediate imports that is direct or indirectly absorbed by theimporting country (production sharing activities with the source or third countries), socompletely reflects the degree of foreign production factors’ participation in the homecountry/sectors’ production of final products, and measures international productionsharing activities from another perspective: how a country’s final goods production relieson other countries’ production factors’ contribution, but also reveal the role of domesticfactor has played in deep cross country production sharing arrangement.In summary, a complete picture of a country’s participation in GVCs from theperspective of production factor contents needs to consider measures based on bothforward and backward industrial linkages. The forward-linkage based GVCs participationmeasures domestic value-added generated from GVCs production and trade activities as ashare of total sector value added (GDP). It views a country/sector’s engagement in GVCsactivities from the producer’s perspective. The backward-linkage based GVCsparticipation measures the percentage of a country’s final goods production contributedby both domestic and foreign factors that involve cross country production sharingactivities. It views a country/sector’s engagement in GVC activities from the buyer’sperspective. The two indexes not only quantify the extent to which a country/sectorintegrated in GVCs, but also indicate a country/sector’s position in the global productionnetwork. For instance, a higher degree of forward participation than backwardparticipation implies that the country/sector is more actively engaged in upstream thandownstream production activities in GVCs.3. Numerical ResultsIn this section, we will apply the GVC participation measures developed in theprevious section to the WIOD data (2016 version), which covers 44 countries and 56industries over the time period 2000 to 2014. Since the indexes can be computed at both14
the most aggregated “world” and the more disaggregated “bil
Global Value Chain Participation and Recent Global Business Cycle Zhi Wang University of International Business and Economics & George Mason University Shang-Jin Wei Columbia University Xinding Yu and Kunfu Zhu University of International Business and Economics, China February 2017 Abs
Product Value Chain (PLM), Procurement, Maintenance, Manufacturing, Value Chain Execution, and Value Chain Planning. New this year is a Cross Value Chain track, an integrated view across all areas. Product Value Chain Solution Area The Product Value Chain Solution Area
2 The concept, context and role of Agricultural Value Chain Finance (AVCF) in Africa 2.1 The concept 2.2 Key participants and other key components 2.3 Value chain finance (VCF) approach enhances export competitiveness 2.4 Value chain boosts sustainable agricultural development 2.5 Value chain finance (VCF) can enhance poverty reduction
the value chain – a systemic view and complementary program of inputs must be adopted. Figure 1: Generic Agricultural Value Chain System 8. The primary mechanisms for enhancing value chain performance are by: (i) reducing costs at any point along the value chain, (ii) differentiating products by making them uniquely
and other value chain actors have traditionally looked to a category of financial services known as value chain finance. Defined as financial services that flow to or through any point in a value chain, value chain finance plays an important role in providing actors with the working capital or investment financing necessary to improve returns
DEFINITION. The bi-chain condition holds in L if every bi-chain of CX terminates. We note that the bi-chain condition is self-dual. Moreover, f[An,in-)pn} is a bi-chain ofdl, Im (in) is a descending chain and Ker(pn) is an ascending chain. Hence the bi-chain condition holds in L if the ascending and descending chain conditions both hold.
Circular Chain (Curved Chain) 63 Double Pitch Conveyor Chain C2040 to C2160H C2042 to C2162H 64 ANSI Roller Chain with Attachment 25 to 160 65 Double Pitch Roller Chain with Attachment 66 ANSI Roller Chain with Extend Pin 35 to 120 67 Double Pitch Roller Chain with Extend Pin C2040 to C2102H 68 ANSI Roller Chain with Wide Contour Attachment 69 D
Value created by a high-performing supply chain No value whatsoever Little value Moderate value. High value Very high value. n 1,379 Note: Figures may not add up to 100 because of rounding. Do your CEO and executive management team appreciate the alignment of business strategy and supply chain strategy? 31 59 8 2. Absolutely. Supply chain is .
TARGET Questions & Answers 1 Mark Salient Features : Prepared as per the New Textbook for the year 2018. Complete 1 mark questions for all chapters. In-text, S, HOT Board Expected Questions (BEQ) & Answers. Useful for Public Exam 2019. SURA PUBLICATIONS Chennai HIGHER SECONDARY FIRST YEAR Sigaram Thoduvom ECONOMICS This material only for sample orders@surabooks.com For More Details 9600175757 .
