Foreign Final Demand Research Articles

Calculation of embodied mercury emissions from international trade: An empirical study from China

How to use the world input-output table to calculate the embodied mercury emissions from international trade is important for the determination of mercury emission sources and targeted reduction of mercury emissions. This paper first discusses the current situation of mercury emissions and the progress of academic research, and introduces the calculation methods and data sources of the world input-output table. Then, China's embodied mercury emissions caused by international trade are calculated using the 2019 world input-output table from the Carbon Emission Accounts and Datasets which includes detailed data for 134 sectors in 235 countries. The main conclusions are as follows: labor-intensive and energy-intensive industries have high embodied mercury emissions due to foreign final consumption demand, with the combined emissions from metal smelting, energy supply, and agriculture accounting for over 80 % of the total embodied mercury emissions. Moreover, the embodied mercury emissions caused by the final consumption demand of the United States, Japan, Germany, India, and South Korea are large, accounting for approximately 40 % of the total emissions.

The Drivers of Employment Manufacturing Growth

ABSTRACT In this paper, we analyze the evolution of China’s production structure. Through the use of a subsystem approach and world input-output tables, we assess the role played by domestic and foreign final demand in the Chinese manufacturing subsystem. The results indicate that the importance of domestic demand has increased since the years of the crisis, forming a U-shape over the period. The dependence on foreign demand remains crucial for high-tech subsystems, and the medium high-tech subsystems are central to the growth of domestic demand. In addition, final demand and labor intensity play a significant role in employment growth.

Intersectoral and intercountry linkages as drivers of employment growth in emerging economies: The case of Visegrád countries

AbstractThis study provides new empirical evidence on the transformation of the structure of production in the Visegrád (V4) countries—the Czech Republic, Hungary, Poland, and Slovakia—using a multi‐regional version of the subsystem approach to global input‐output tables. In particular, the paper analyses structural change in these countries, with a focus on the integration of market services in manufacturing. Moreover, using an input‐output structural decomposition analysis (SDA), we evaluate the role of some key determinants of employment changes in manufacturing. The results indicate that an increasing amount of intermediate demand comes from producer services. Further, a substantial portion of manufacturing employment is generated by foreign final demand, and the SDA demonstrates that labour intensity and final demand play a determining role in the change in the number of hours worked.

Global Supply Chain Drivers of Agricultural Antibiotic Emissions in China.

Antibiotic pollution causes serious environmental and social issues. China is the largest antibiotic producer and user in the world, with a large share of antibiotics used in agriculture. This study quantified agricultural antibiotic emissions of mainland China in 2014 as well as critical drivers in global supply chains. Results show that China's agriculture discharged 4131 tons of antibiotics. Critical domestic supply chain drivers are mainly located in Central China, North China, and East China. Foreign final demand contributes 9% of agricultural antibiotic emissions in mainland China and leads to 5-40% of emissions in each province. Foreign primary inputs (e.g., labor and capital) contribute 5% of agricultural antibiotic emissions in mainland China and lead to 2-63% of emissions in each province. Critical international drivers include the final demand of the United States and Japan for foods and textile products, as well as the primary inputs of the oil seeds sector in Brazil. The results indicate the uniqueness of supply chain drivers for antibiotic emissions compared with other emissions. Our findings reveal supply chain hotspots for multiple-perspective policy decisions to control China's agricultural antibiotic emissions as well as for international cooperation.

Productivity and wage effects of firm‐level upstreamness: Evidence from Belgian linked panel data

AbstractThis paper is the first to estimate the impact of a direct measurement of firm‐level upstreamness (i.e. the steps—weighted distance—before the production of a firm meets either domestic or foreign final demand) on productivity and wage costs. To this end, we merged detailed Belgian linked panel data, covering all years from 2002 to 2010, with a unique dataset containing accurate information on the yearly position of each firm in the value chain. We rely on the methodological framework pioneered by Hellerstein et al. (Journal of Labor Economics, 1999, 17, 409) to estimate panel data models at the firm level. Controlling for key worker and firm characteristics, our GMM‐SYS and FE‐IV estimates show that firms positioned more upstream (i.e. further away from the final consumer) create more value. Our results also indicate that the impact of firm‐level upstreamness is stronger on productivity than on wage costs, which implies that profitability is fostered. More precisely, in line with Belgium's strong labour market institutions, our estimates suggest that the productivity gains associated with upstreamness are shared almost equally between wages and profits.

Critical supply chains for mitigating PM2.5 emission-related mortalities in India

Air pollution and its health-related effects are a major concern globally, and many people die from air pollution-related diseases each year. This study employed a structural path analysis combined with a health impact inventory database analysis to estimate the number of consumption-based PM2.5 emission-related deaths attributed to India’s power supply sector. We identified critical supply chain paths for direct (production) electricity use and indirect (consumption) use. We also considered both domestic and foreign final demand and its effect on PM2.5 emission-related deaths. Several conclusions could be drawn from our results. First, the effect of indirect electricity usage on PM2.5 emission-related deaths is approximately four times larger than that for direct usage. Second, a large percentage of pollution-related deaths can be attributed to India’s domestic final demand usage; however, electricity usage in the intermediate and final demand sectors is inextricably linked. Third, foreign final demand sectors from the Middle East, the USA, and China contribute indirectly toward PM2.5 emission-related deaths, specifically in the rice export supply chain. The results show that the Indian government should implement urgent measures to curb electricity use in rice supply chains in order to reduce the number of PM2.5 emission-related deaths.

Global Economic Structure Transition Boosts Atmospheric Mercury Emissions in China

AbstractAs the “world factory,” China has the most massive anthropogenic atmospheric mercury (Hg) emissions in the world along with its intense production activities. The development of global society and economy, including technology development, consumption behavior evolution, population growth, and so on, would significantly affect China's production and thus the Hg emissions. Here we uncover critical global socioeconomic drivers of atmospheric Hg emission changes in China during 2005–2015. Results show that the transition of global economic structures (i.e., production and final demand structures) caused 179 tons of increase in China's atmospheric Hg emissions during this period if other factors remained constant, while the transition of foreign economic structures contributed as much as 83% (149 tons). More importantly, for the first time, we reveal the crucial role of production structure transition in foreign nations. The cumulative effect of foreign production structure transition during this period (93 tons) was larger than that of foreign final demand structure transition (56 tons). It is also far more extensive than the cumulative effect of China's production structure transition (9.5 tons). Previous studies on China's atmospheric Hg emissions driven by global final demand focused more on optimizing consumption behaviors. However, this study proves the significance of a greener global production structure for reducing anthropogenic atmospheric Hg emissions in China, thus implementing the Minamata Convention on Mercury.

МЕЖДУНАРОДНАЯ ТОРГОВЛЯ В КАТЕГОРИЯХ ДОБАВЛЕННОЙ СТОИМОСТИ: ВОПРОСЫ МЕТОДОЛОГИИ

The article is aimed to investigate and discuss methodological issues and challenges related to the measurement of international trade in value added terms. Basing on the analysis of the concept of Global Value Chains (GVCs) and the substance of related theoretical categories, the author gives his own vision of the place that the Trade in Value Added (TiVA) concept occupies in the modern economic theory. It is pointed out that various approaches to the definition of value added, global chains, global value added chains, global import intensity, and other terms appeared recently. The author focuses on the problem of double-counting of intermediary goods (that leads to overstatement of the importance of trade) and on the estimations of the differences between exports in value added terms (so-called domestic value added embodied in foreign final demand) and gross exports. Such discrepancies reach as much as 25% of gross flows. Special attention is paid to the use of the World Input–Output Database (WIOD) in the analysis of the international trade. Its usefulness is illustrated by applying it to both intermediate goods and final products of Russian manufacturing exports. The author agrees with those economists who believe that conceptual framework of international trade in value added has been enhanced in the latest decade. Following Koopman et al. (2010) it is shown that a country’s exported value added can be broken down into three large components, including domestic value added, returned domestic value added and foreign value added. The author’s conclusion is as follows: Global Value Chains should not be regarded in themselves. They appear only where their total benefits exceed their total costs including transactional and other costs. Acknowledgements. The article was prepared at the Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences and supported by a grant from the Russian Science Foundation (project no. 14-28-00097 “The optimization of Russian external investment ties under deterioration of relations with the EU”).

De- vs. Re-Industrialisation: Is Structural Change Reversible?

We investigate the causes of de-industrialisation and potential for re-industrialisation. Using WIOD data and introducing new measures of "induced value added chains", we directly relate a sector's income share to the net value added flows as induced by domestic and foreign final demand. This method identifies the declining share of manufacturing in domestic expenditures on final demand to be the main cause of de-industrialisation. International trade has a limited impact, though differences in comparative advantage between countries do matter. In addition, the strong decline of relative prices in manufacturing points to an interesting policy paradox: precisely if successful in raising competitiveness and hence productivity growth of manufacturing, they also further its global decline of relative prices. Contrary to the stated objective of re-industrialisation, meaningful industrial policies will accelerate de-industrialisation in the global economy. To raise the income share of manufacturing, policies must target, e.g., competition and productivity growth in services.

Economic impact of production bottlenecks caused by disasters impacting interdependent industry sectors

This paper provides a new linear programming model, based on Leontief׳s input–output model, to investigate the economic consequences of production capacity bottlenecks caused by disasters. An important contribution of the paper is the incorporation of industry sectors׳ preferences in allocating limited products/services between final domestic demand, foreign final demand, and intermediate industries. This provides support for estimating some of the indirect economic impacts of disasters. The paper also considers recovery operations within disrupted sectors, from the standpoint of evaluating the performance of the economy during the transition period after a disaster. The models are implemented to investigate the economic consequences of electricity sector disruption in Singapore and, finally, computational results are reported.