Input-output Tables Research Articles

Measuring Structural Power in Global Value Chains: Evidence from Malaysian Manufacturing

The global value chain (GVC), as the most important feature and driving force of globalisation has profoundly shaped state–market relations, as well as the international political economy. This paper uses Malaysia as a case study to demonstrate a country’s embedding structural power in GVC. Deploying the OECD’s Inter-Country Input-Output Table from 1995 to 2018, two indicators were constructed, namely power of value added (PV) and interaction of value added (IV), to measure Malaysia’s structural power in GVC. The results indicate that Malaysia’s PV in GVCs has declined over the years. A combination of high GVC participation but low GVC position indicates that Malaysia’s export sector remains stuck in low value-added activities despite being highly integrated into global production networks. Also examined is the value-added interaction between Malaysia and major economic powers, such as the US, China and Japan. In so doing, we provide an evolutionary explanation of Malaysia’s location in the international political economic system where economic and political power are increasingly intertwined.

Identification of the bias in embodied emissions flows and their sources

Input-output (IO) table has been widely used to investigate the relationship between the environment and the economy. As pre-analysis data treatment could give rise to information distortion in the adjusted tables, a large body of national IO-based analysis on environmental issues potentially suffer from imports data treatment. When national IO tables with different imports assumptions are available, it is important and possible to investigate the distortion and corresponding bias in findings. Via embodied carbon emissions, a set of IO-based techniques are utilized to analyze the source and transmission of the bias. The empirical study of China shows that relative indicator (embodied intensity) performs more robustly than absolute indicator (embodied emissions) at all transmission layers. Bias in embodied emissions accumulates to ±183.6 Mt. across the products. Supply chains of S27-Construction, S20-Electronic equipment and S18-Transport equipment are most distorted, with sectors such as chemicals, metals and non-metallic minerals as key nodes in transmitting the bias. The decomposition analysis also shows that the bias in S27 (137.9 Mt), S20 (34.7 Mt) and S18 (24 Mt) is primarily due to distorted intermediate use, while the bias in S14 (35.0 Mt) is mainly caused by distorted final demand. Implications on policies and other IO-based studies are discussed.

FAOSTAT Food Value Chain Domain implementation: Input Output modelling and analytical applications

The recent increasing attention to the economic and policy analysis of the food systems from international fora, public institutions and academia calls for the availability of information and data capable of informing about the interrelations across economic sectors and within value chains. The international policy agenda is pushing for a more effective application of measures at country and regional level in line with the recommendations of the 2030 Agenda and its Sustainable Development Goals, for which more systematic and integrated data about economic, social and environmental impacts of policies are requested. The Food Value Chain Domain recently published in FAOSTAT responds to this call. Its data and information shed light on the distribution of final domestic food expenditures across industries (Agriculture, Food Processing, Wholesale, Retail, Accommodations and Food Services) and primary factors (e.g.: Labour, Gross Operating Surplus) on the relative food value chain. The FAOSTAT Domain offers therefore robust and granular information on both the farm and the post-farm gate component of the Food Value Chain. The applied Global Food Dollar methodology, that FAO is contributing to upscale at global level, is based on Leontief decomposition approach on the Input-Output tables. Moreover, whenever the Input-Output table are not available, it is now possible to impute them from Supply-Use tables by applying a conversion methodology, developed by FAO in compliance with European (EUROSTAT), United Nations (UNSD) and international statistical standards as the System of National Accounts. This allows to extend the analysis to several African, Asian, and Latin American countries that produce on regular basis only Supply and Use Tables, and not Industry by industry Input Output Tables. The potential time and data coverage of the methodology is therefore significantly expanded. The aim of this paper is to describe the conceptual framework of the conversion methodology of Supply-Use Tables into Input-Output Tables of the Global Food Dollar methodology, and the potential implementation scope of these methodologies. Preliminary analytical findings of the applied methodologies are presented as well. The new methods and data presented in this paper, being based on data compliant with the International Statistical Standards, as the System of National Accounts, and therefore comparable across countries, associated to larger data availability, have the potential to effectively support food policies at international, regional and national level, as well as contribute to a decision making in line with the 2030 Agenda.

Promosi Tenun Khas Bima Sebagai Penguatan Identitas Kota Bima Melalui Kegiatan Lombok Essay Competition

This community service activity aims to promote and strengthen the identity of Bima City through the development of typical Bima weaving. The method is to take part in the Lombok Essay Competition Event. The activity began with cultural and economic observations in Bima City, followed by assistance in the preparation of scientific work on Bima typical weaving which was presented at the event on March 9-12 2024. The results showed that the Bima typical weaving industry provided a significant multiplier effect on other industries in Bima City. Analysis of the Input-Output derivation table shows an increase in final demand of 1.4 billion rupiah in the Bima typical weaving industry. In conclusion, this activity is able to promote Bima's typical weaving as the identity of Bima City and provide a positive economic impact, as well as having the potential to support local development and community empowerment.

Implications of the WTO and EU fuel taxation reforms for a European fishing fleet: effects, side-effects and alternative approaches from an input–output analysis of the Galician (northwest Spain) fleet

The World Trade Organization (WTO) and European Union (EU) have both put forward tax reforms that impact fisheries’ fuel costs, which are similar in the object of taxation but quite different in the externalities addressed, goals, scope, exemptions or tax rates, creating an opportunity to compare the effects and discuss the alternatives. These proposals are the result of long and intense debates in political, social and academic spheres. However, certain aspects remain unclear. First of all, the number of empirical studies is still limited, particularly considering that fisheries governance is subject to heterogeneous management systems and institutional contexts creating room for different potential outputs. Second, coastal states have no fiscal competence beyond 12 miles, which limits the scope of the reforms to small scale fleets (SSF). All in all, the economic consequences for the fleets remain unclear. To this end, we will build on the Galician fishing sector (NW Spain) input–output tables to discuss the direct impacts, effects and side effects of these reforms on a representative European fleet. Flaws identified in both initiatives mean that targeted externalities will not be corrected and, moreover, additional ones, such as distributional effects penalising SSF or fuel spillovers, could be boosted. Alternative policy approaches are discussed.

Measuring the forest-based bioeconomy in Estonia, Latvia, Lithuania, and Finland

ABSTRACT This paper aims to present an input-output model of the forest-based bioeconomy, enabling insight into its contribution to total gross value added (GDP), employment, and CO2 emissions in Estonia, Latvia, Lithuania, and Finland. To quantify this contribution, the paper utilizes input-output tables of the four countries. The forest-based bioeconomy includes forestry, the processing of forestry products (forward linkages), and the direct and indirect use of inputs (backward linkages) from forestry and processing industries. Our analysis reveals that while forestry itself is a small industry, contributing minimally to GDP (ranging from 0.40% in Lithuania to 1.90% in Finland), and the forest-based bioeconomy is considerably larger. For instance, its contribution to GDP ranges from 3.59% in Lithuania to 7.22% in Estonia. Moreover, the forestry-based bioeconomy exhibits negative net CO2 emissions, primarily due to CO2 sequestration by forest lands and harvested wood products. Despite the substantial negative CO2 emissions associated with forestry activities, without sequestration, the forestry-based bioeconomy's share in total emissions ranges from 5.14% in Lithuania to 14.88% in Finland.

Impacts of forest plantation programs on sectoral CO2 emissions regionally in New Zealand

Investing in projects that support environmental benefits, such as tree harvesting, has the potential to reduce air pollution levels in the atmosphere in the future. However, this kind of investment may increase the current level of emissions. Therefore, it is necessary to estimate how much the policy affects the current level of CO2 emissions. This makes sure the policy doesn’t increase the level of CO2 emissions. This study aims to analyze the effect of the One Billion Trees program on CO2 emissions in New Zealand by employing the 2020 input–output table analysis. This investigation examines the direct and indirect effects of policy on both the demand and supply sides across six regions of New Zealand. The results of this study for the first year of plantation suggest that the policy increases the level of CO2 emissions in all regions, especially in the Waikato region. The direct and indirect impact of the policy leads to 64 kt of CO2 emissions on the demand side and 270 kt of CO2 emissions on the supply side. These lead to 0.19 and 0.74% of total CO2 emissions being attributed to investment shocks. Continuing the policy is recommended, as it has a low effect on CO2 emissions. However, it is crucial to prioritize the use of low-carbon machinery that uses fossil fuels during the plantation process.

Dynamics of Distribution, Industry Associations and Convergence Analysis in China’s Digital Economy Development

This paper measures the scale of digital industrialization and industrial digitalisation in 30 provinces in China from 2002 to 2017 based on the input-output table, and analyses the evolution dynamics, industrial association characteristics and their convergence using Kernel density estimation, Dagum Gini coefficient, and economic convergence model. The results of the study show that there is a regional imbalance in the development of China’s digital economy with the coast being lower than the inland; the difference in the distribution of dynamics within the four major economic regions is gradually expanding, with the most obvious in the central and western regions; the characteristics of the digital industrialization correlation show the evolution path of “energy industry → service industry → manufacturing industry → agriculture”; there is a convergence in all aspects of the digital economy in the country, and the economic convergence model is applied to each economic region. There is σ — convergence in all aspects of the digital economy in the country as a whole, and the results of σ — convergence in each economic region are somewhat different; β — absolute convergence exists in the country as a whole and in each economic region, and only the central and northeastern parts of the country have insignificant results in conditional β convergence. The overall rate of convergence is characterized by “East > West > Central > Northeast”.

Global value chains before and in times of the COVID-19 pandemic

Abstract This paper aims to examine the changes in global value chains (GVCs) in the years 2020–2022 (times of the COVID-19 pandemic) compared to 2019 (last year before the pandemic). GVCs are illustrated by diagrams based on the statistics on international trade measured by value-added exports and imports. In this paper, the final demand approach is applied to measure international trade by value-added exports and imports and they were computed based on inter-country input-output tables delivered by the Asian Development Bank (ADB). The catchphrase “Made in the World” makes an impression, but in reality, value chains are rarely global. They are rather regional with three centers. “Factory Europe”, “Factory Asia”, and “Factory America” can easily be identified in the years 2019–2022 as there were three large regional supply hubs in GVCs: Germany, China, and the United States. When the years 2020–2022 were compared to 2019, “Factory Asia” with center in China elevated their position in GVCs at the expense of “Factory Europe” with center in Germany and “Factory America with center in the USA.”

Estimating the economic multipliers for wildlife-based tourism in Zambia

ABSTRACT We derived 2015 wildlife-based tourism multipliers for the rural area of Zambia where input-output tables (I-OT) are unavailable. To estimate multipliers in a data-poor environment, the national direct requirements coefficients were first derived from the country’s 2010 I-OT. These direct requirements coefficients were re-scaled to rural area region by multiplication with the rural area production percentage shares, while the total requirements coefficients were computed through an inverse matrix conversion (Leontief inverse matrix). This procedure is particularly useful for rural area regions with active wildlife-based tourism, where input-output tables are unavailable, with time and financial resource constraints. The ranges of the derived direct multipliers for output, income, employment and value-added multipliers were 1.10–1.27, 0.04–0.20, 6.01–35.81 and 0.52–0.71, respectively. These estimated multipliers can be used in economic models for measurement of the economic impacts of protected areas is vital for planning and management purposes and for public understanding of wildlife resource values.

Household Consumption in the Mirror of Input–Output Tables

Household Consumption in the Mirror of Input–Output Tables

Structural Evolution and Its Determinants of Domestic Value-Added Network of Digital Service Exports Based on Temporal Exponential Random Graph Model

ABSTRACT Digital service trade has become an important engine of world economic growth, and its competitive landscape is also evolving. We construct domestic value-added networks of digital service exports (DVAN-DSEs) from 1995 to 2018 based on the world input-output table, and explores their structural evolution and determinants using Temporal Exponential Random Graph Model. We find that (a) the DVAN-DSEs present the features of agglomeration, heterogeneity, reciprocity and unevenness. (b) The United States and European countries are the core in DVAN-DSEs. (c) Preference attachment, structural embeddedness, delayed reciprocity, stability, variability, Matthew effect in GDP, population and Internet coverage, geographical proximity, cultural similarities, and regional trade agreements play important roles in the evolution of DVAN-DSEs. (d) Structural embeddedness and geographic proximity only facilitate new relationship construction, while other factors influence both relationship establishment and maintenance. Countries should build network facilities, expand trading partners and promote trade agreement negotiations to facilitate the development of digital service trade.

Regionalizing the supply chain in process life cycle inventory with multiregional input–output data: An implementation for ecoinvent with EXIOBASE

AbstractLife cycle inventory (LCI) databases, such as ecoinvent, are crucial for life cycle assessment (LCA), but lack country‐specific resolution in activity details and trade between regional activities in the supply chain. For example, ecoinvent only provides rest‐of‐world and European datasets for photovoltaic panel production, consuming the same global consumption mix of photovoltaic cells. Global or continental activities and trade limit the use of existing country activities, such as electricity production, and the accuracy and granularity of LCA results. We addressed this issue by disaggregating ecoinvent's global and continental unit processes to the country level and by regionalizing trade using country‐sector‐specific consumption mixes of product origins from the multiregional input–output table EXIOBASE. This produced a consistently regionalized ecoinvent at country level. Comparing the climate change impacts of 195,708 non‐market datasets in our regionalized ecoinvent with reference datasets in ecoinvent reveals manufacturing sectors as the most affected. The study of photovoltaic panel production shows that the differences in climate change impacts are mainly due to the different country‐specific suppliers of components and their electricity mixes, which are lost in the aggregated original data. The water consumption impacts of wheat production show the country differences only when regionalized CFs are applied, indicating that regionalized biosphere and technosphere flow amounts are needed for better results. The mapping quality between ecoinvent and EXIOBASE and inconsistent market definitions were discussed along with further limitations. Our study highlights the potential of incorporating better trade information and regional disaggregation in LCI databases to improve the LCA outcomes.

The North-South industrial transfer of manufacturing and the pattern of carbon emissions in China

In recent years, the gap between the north and the south of China has been expanding, showing a decreasing proportion of value-added and an increasing proportion of carbon emissions in the north of China, and vice versa in the south of China. Based on the most recent inter-provincial input-output table of China in 2012 and 2017, this paper focused on the North-South industrial transfer of manufacturing, quantified its impact on regional carbon emissions, and decomposed the path of impacts. The results suggest that the North-South industrial transfers of China during 2012-2017 indeed aggravated the imbalance of carbon emissions in the north and the south of China. Further explorations of path decompositions show that the spillover effect through production linkages is the major path where industrial transfer influences regional carbon emissions, particularly in the north of China. The results provide insightful policy implications for the achievement of carbon emissions reduction targets in China as well as the globe.

A Case Study on Input–Output Analysis in the Defense Industry

Recently, the defense budget, which includes the cost of purchasing weapons, has continuously and significantly increased in South Korea. This increase, which is entirely financed by the government, has raised the issue of the socioeconomic impacts of spending on the defense industry in areas, such as production, added value and job creation. In this regard, it is necessary to more accurately measure the impact of spending on the defense industry on domestic industry, but the Bank of Korea’s industry inducement coefficient, which measures industrial spillovers, is quite limited in measuring the industry inducement impact caused by weapon production. Therefore, this study explores how to estimate the industry inducement coefficient of the production of a specific weapon by utilising the current Bank of Korea input–output table, which is focused on private industry, and applies this methodology to the estimation of the input–output coefficient of the production of a specific weapon. As a result of the analysis, the input–output coefficient of a specific weapon was estimated to be approximately 1.18 times higher than that of the products of similar industries in the private sector in terms of production, 1.03 times higher in terms of value-added and 1.03 times higher in terms of employment. This suggests that the effect of fostering domestic industry through weapon production is somewhat greater than that of private industry and proves the efficacy of government investment in this sector.

Indirect channel of trade agreements in deepening global value chains

AbstractPreferential trade agreements (PTAs) between trading partners are known to have positive impact on the expanding and deepening of global value chain integration due to lower trade and investment barriers. Less is known, however, is if other PTAs of PTA partners have any impact on the value‐added trade linkages of the direct PTA partners concerned. Based on compositive indicators measuring the breadth and depth of PTAs from 2007 to 2018 and using Multiregional Input–Output Table database covering 62 countries and 35 sectors and the Content of Deep Trade Agreements database, this paper estimates the multiplicative form of the constant‐elasticity augmented gravity equation model by a Poisson Pseudo Maximum Likelihood (PPML) estimator. This study shows that indirect impact of the deepening of trade agreements of a country's PTA partner exerts positive, significant impact on value‐added exports of a country. Both backward and forward linkages of a country measured by various decomposition of valued added exports indicate this indirect channel of value chain deepening effect even outweighs the direct impact from the deepening of PTAs between direct trading partners with significant policy implications in formulating PTA strategies.

Determinants of the growing material footprints along the Belt and Road

AbstractThe Belt and Road Initiative (BRI) has induced immense material consumption and environmental threats while fostering economic development along participating countries. Quantifying recent trends of the material footprint of BRI economies and identifying potential drivers are vital to inform sustainable resource use. However, an assessment on the determinants of BRI material consumption from an economic system viewpoint is lacking in the literature. To fill this gap, this study proposes a multi‐region structural decomposition analysis model to assess the drivers of material footprints in BRI economies. To scrutinize the effects of transitioning economic structures, the effects of domestic and cross‐border production activities are separated. The latter is further characterized by production technology and sourcing structure. Using global multi‐region input–output tables of 2005–2015, this study reveals that shifting international sourcing patterns boosted BRI material footprint, with rising intermediate goods and services sourced from BRI regions substituting those from North America and the European Union. Capital formation in the construction sector took the primary role in driving BRI material footprint growth, followed by manufacturing sectors, especially since 2013. Disparities in the key drivers of material footprints have been identified among developed, emerging, and least developed economies. The results have relevant policy implications regarding alleviating BRI material pressure, including fostering material‐efficient demand patterns, facilitating environmental technology improvements in local countries, and establishing stringent governance on material usage.

An “Extended method” for measuring intersectoral linkages: The case of the Greek tourism sector

This paper assesses the intersectoral linkages of the tourism sector of the Greek economy using an extended version of the hypothetical extraction method, which allows the intersectoral effects of the labor force reproduction process to be taken into account, and data from the symmetric input-output table for the year 2015. The findings of our analysis show that the role of tourism in the Greek economy is more as a seller of inputs in other sectors than as a buyer of inputs, a finding that can be reduced to the high participation of the tourism product in the labor force reproduction process. In other words, an increase in demand for the tourism product cannot bring about a strong growth in the economy, since the sector's dependence on inputs from other sectors for its operation is low and, therefore, the increase in the tourism product does not lead to a large increase in the production of the other sectors. On the contrary, an increase in demand for the products of other sectors will lead to a strong growth of the tourism sector, since the dependence of other sectors on inputs of the tourism sector is high. The interdependencies in the production structure of the Greek economy show that the tourism sector cannot be the basis of a growth policy (i.e. by stimulating tourism demand), but, conversely, the growth of the Greek economy will lead to a significant increase in its tourism sector.

Firm's position in global value chains and its impact on pollutant emissions: Evidence from Chinese manufacturing firms

This paper studies examines how a firm's position in the global value chain affects its pollutant emissions. This paper integrates China's firm-level trade data into China's multi-regional input-output tables to provide an index to measure a firm's position in global value chains. Based on a firm-level pollution dataset (2000–2014) in China, this paper conducts an empirical analysis and find that the most-downstream firms on the global value chain have lower pollutant emission intensity. Our results also suggest that the production factor structure effect, the knowledge absorption effect and the abatement investment effect together contribute to the emission intensity gap between the most-upstream firms and the most-downstream firms. These novel results are significant in guiding firms towards reducing their emissions and promoting a green global value chain, with the ultimate goal of achieving multinational environmental protection.

Unveiling the COVID-19 Recession: The Effect of Sectoral Exposure on the Economy and Labor Market

Introduction/Main Objectives: The impacts of the COVID-19 pandemic on economic and labor market conditions still need further research. This is because the pandemic had different and more extensive impacts than the 2008 global financial crisis. Background Problems: The lack of studies that explore the sectoral exposure of the economic and labor market to COVID-19 motivates this study to examine the problems and determine the impacts of the pandemic on the economy and labor market heterogeneity. Novelty: The sectoral exposure classification was based on sectoral risk and teleworkability indicators. Furthermore, input-output tables are used to analyze the interregional economic linkages based on economic activities in terms of sectoral exposure. To the best of the author’s knowledge, this is the first study to explore the topic in Indonesia. Research Methods: The data used are a cross-section of 34 provinces in 2020. This study uses input-output tables to examine the relationship between sectoral exposure and the economy. In addition, regression analysis is used to examine the effect on the labor market. Finding/Results: The industry categorized as having medium-high sectoral exposure is the key sector in Indonesia because the forward and backward linkage has a value of more than 1. It means medium-high sectoral exposure greatly affects other industries' input and output. According to the OLS result, sectoral exposure significantly impacts short-time workers and the unemployment rate. Conclusion: This study implies that sectoral exposure to COVID-19 was significant for Indonesia's economic and labor market.