Inter-Country Input-Output Tables Research Articles

Analysis of inter-country input-output table based on citation network: How to measure the competition and collaboration between industrial sectors on the global value chain.

The input-output table is comprehensive and detailed in describing the national economic system with complex economic relationships, which embodies information of supply and demand among industrial sectors. This paper aims to scale the degree of competition/collaboration on the global value chain from the perspective of econophysics. Global Industrial Strongest Relevant Network models were established by extracting the strongest and most immediate industrial relevance in the global economic system with inter-country input-output tables and then transformed into Global Industrial Resource Competition Network/Global Industrial Production Collaboration Network models embodying the competitive/collaborative relationships based on bibliographic coupling/co-citation approach. Three indicators well suited for these two kinds of weighted and non-directed networks with self-loops were introduced, including unit weight for competitive/collaborative power, disparity in the weight for competitive/collaborative amplitude and weighted clustering coefficient for competitive/collaborative intensity. Finally, these models and indicators were further applied to empirically analyze the function of sectors in the latest World Input-Output Database, to reveal inter-sector competitive/collaborative status during the economic globalization.

Regional contents in exports by major trading blocs in the Asia-Pacific region

PurposeThe purpose of this paper is to calculate regional contents in the exports of the major regional blocs to the world, Trans-Pacific Strategic Economic Partnership (TPP), and Regional Comprehensive Economic Partnership (RCEP), respectively, to find the backward trade linkages between them instead of normal forward linkages.Design/methodology/approachTo calculate “a region” content in intermediate and value-added exports, this paper uses OECD’s inter-country input-output table (ICIOT), and tries to decompose the contents of trade. Using the information of ICIOT, Koopman et al. (2014) and Wang et al. (2013) decompose gross exports of a country’s exports.FindingsTPP is a loosely tied bloc featured by openness to the Asia-Pacific region. Trade linkages between members are stronger in RCEP than those in TPP, particularly in the trade of intermediate goods. Trades in RCEP are closely connected to exports to TPP, but the opposite direction is not clear.Research limitations/implicationsFirst of all, the recent base year of the data on value added in trade is 2011, which can be regarded as a little bit out of date. Therefore, it should be cautious in interpreting the results in that it may not reflect the characteristics of current trade. Second, this paper uses ICOIT instead of world input-output table.Practical implicationsA large portion of trades in RCEP and TPP is triggered by a global production network (fragmentation, vertical specialization), different from traditional trade focusing on inter-industry trade or competition between countries. Thus, the formation of TPP or RCEP is predicted to stimulate trade of the other instead of discriminating nonmember countries.Social implicationsIn particular, the authors have special concern in the backward linkages between RCEP and TPP, the distinct characteristics of the two regional blocs and, finally, major countries’ preferences of the one over the other and industrial conflicts toward TPP or RCEP even in an economy.Originality/valueAlthough this paper uses the approach by Baldwin and Lopez-Gonzalez, this paper is the first research on the analysis of the export contents in major trading blocs in the Asia-Pacific region.

Global industrial impact coefficient based on random walk process and inter-country input–output table

Input–output table is very comprehensive and detailed in describing the national economic system with lots of economic relationships, which contains supply and demand information among industrial sectors. The complex network, a theory and method for measuring the structure of complex system, can describe the structural characteristics of the internal structure of the research object by measuring the structural indicators of the social and economic system, revealing the complex relationship between the inner hierarchy and the external economic function. This paper builds up GIVCN-WIOT models based on World Input–Output Database in order to depict the topological structure of Global Value Chain (GVC), and assumes the competitive advantage of nations is equal to the overall performance of its domestic sectors’ impact on the GVC. Under the perspective of econophysics, Global Industrial Impact Coefficient (GIIC) is proposed to measure the national competitiveness in gaining information superiority and intermediate interests. Analysis of GIVCN-WIOT models yields several insights including the following: (1) sectors with higher Random Walk Centrality contribute more to transmitting value streams within the global economic system; (2) Half-Value Ratio can be used to measure robustness of open-economy macroeconomics in the process of globalization; (3) the positive correlation between GIIC and GDP indicates that one country’s global industrial impact could reveal its international competitive advantage.

Domestic Value-added Growth is Vital

Gains under the global value chains (GVCs) depend on how much of a country’s domestic value added (DVA) is passing onto other countries. However, India’s manufacturing sector is found to be hollowing out, that is, its DVA growth is declining. This article estimates the linkages of manufacturing sector into GVCs, focusing on machinery and textiles industries. It measures foreign value added in exports and gains under GVCs using intercountry input–output tables of OECD–WTO Trade in Value Added (TiVA) database (2015). TiVA shows a decline in India’s share of DVA exports in its gross exports. However, India has ‘net gains’ from linking into GVCs in the two industries as the ratio of forward linkages to backward linkages is greater than one. This indicates that value-added exports are greater than value-added imports. Thus, India has enough potential to compete with other countries in the upper ends of value chains in both its machinery and textiles industries.

A value-added analysis of trade in Taiwan and Korea’s ICT industries

Purpose – The purpose of this paper is to extricate value-added exports in information and communications technology (ICT) industry earned by Taiwan and Korea. Additionally, the authors decompose Taiwan and Korea’s gross exports into various meaningful components. Design/methodology/approach – The authors use the inter-country input-output (ICIO) table which endows with cost structures of industries as well as trade information, facilitating in keeping track of the flow of products and value-added. The ICIO table used in this paper comes from the World Input-Output Database. The authors also use the way Wang et al. (2013) decomposed the intermediate goods exports into various components to provide further insights. Findings – The empirical results indicate that Taiwan and Korea’s ICT export to the world shrink by 47.8 and 40.9 percent when the trades are measured in value-added terms. Taiwan and Korea’s ICT export will also decrease by 75.1 and 57.8 percent. From the viewpoint of value added in trade, the share of value added embodied in Taiwan and Korea’s gross ICT exports continued to decrease and reached 24.9 and 42.2 percent in 2011, while the components of pure double counted terms kept growing in recent years. Originality/value – With global value chains flourishing in recent years, conventional trade statistics not only fails to highlight the vertical specialization among different countries, but also distorts the measurement of a country’s competitiveness. This paper extricates value-added exports in ICT industry earned by Taiwan and Korea and bring into focus the importance of trade in value added.

Follow the Value Added: Bilateral Gross Export Accounting

The diffusion of international production networks has challenged the capability of traditional trade statistics to provide an adequate representation of supply and demand linkages among the economies. To address this issue, new statistical tools (the Inter-Country Input-Output tables) and new analytical frameworks have been developed. Koopman, Wang and Wei propose an accounting methodology to decompose a country’s total gross exports by source and final destination of their embedded value added. We develop this approach further by deriving a fully consistent counterpart for bilateral trade flows, refining the original framework. Along with other contributions, our methodology completes the bridge between traditional trade statistics and the systems of national accounts and provides new tools for investigating global value chains. Here we present two empirical applications of two different versions of our decomposition of bilateral trade flows: one explores the forward linkages of Italian exports; the second derives a measure of the share of value-chain-related trade and assesses how its evolution since the mid-1990s has affected the relationship between world trade and income.

Россия–АСЕАН: торговля и глобальные производственные цепочки

Traditional trade statistics that originate in customs records is inadequate to measure the complex interdependencies in today’s globalized economy, or what is known as the global value chains. The article focuses on Russia–ASEAN trade. The author applies innovative methods of measuring trade in value added terms in order to capture the unobserved bilateral linkages behind the officially recorded trade flows. First, customs and balance of payments sources of bilateral trade data are briefly reviewed. For user, there are at least two inherent problems in those data: the inconsistencies in “mirror” trade flows and the attribution of the origin of a traded product wholly to the exporting country. This results in large discrepancies between Russian and ASEAN “mirror” trade data and, arguably, their low importance as each other’s trade partners. Next, the author explores new data from inter-country input-output tables that necessarily reconcile bilateral differences and offer greater detail about the national and sectoral origin or destination of traded goods and services. Relevant data are derived from the OECD-WTO TiVA database and are rearranged to obtain various estimates of Russia–ASEAN trade in value added in 2009. The main finding is that sizable amount of the value added of Russian origin is embodied in third countries’ exports to ASEAN members and ASEAN members’ exports to third countries. As a result, the cumulative flow of Russia’s value added to ASEAN members is estimated to be 62% larger than the direct gross exports, whereas for China and South Korea it is, respectively, 21% and 23% smaller. The indirect, unobserved value added flows can be largely explained by the use of Russian energy resources, chemicals and metals as imported inputs in third countries (China, South Korea) and ASEAN members’ own production. The contribution of these inputs is then accumulated along the value chain. Finally, the most important sectoral value chains are visualized for readers’ convenience. So far, it’s apparent that Russia is linked to ASEAN countries through intricate production networks and indirectly contributes to their trade with third countries.

Vertical specialization in an intercountry input-output framework

Vertical specialization occurs when countries specialize in certain stages of the global chain of production. Using national input-output tables, it has been proposed to measure vertical specialization as the import content of the exports. However, intercountry input-output tables precisely provide the detailed description of interdependencies of industries between countries that is of interest for global production chains. Therefore, it may be expected that vertical specialization is more adequately measured by using intercountry input-output tables than by using national input-output tables. This paper develops a method to measure vertical specialization for intercountry input-output tables and applies it to the case of six countries in the European Union in 1985, for which data are readily available.

Production Chains in an Interregional Framework: Identification by Means of Average Propagation Lengths

When linkages between industries are studied from the perspective of production chains, sequencing is important. In this respect, both the strength of the linkages and the distance between industries are relevant. Distance is measured by the average propagation length, defined as the average number of steps it takes a stimulus in one industry to propagate and affect another industry. Using the 1985 intercountry input—output table for six European countries, we present three applications—visualizing the production structure by graphing its production chains, analyzing intercountry linkages between industries, and determining the role that each country plays within the system.

A Spatial Structural Decomposition Analysis of Chinese and Japanese Energy Demand: 1985–1990

This paper proposes a spatial structural decomposition analysis to measure the effects of the changes in intra- and inter-country linkages on the embodied energy demand in the concerned country. For the empirical analysis, we have used the China-Japan inter-country input–output tables for 1985 and 1990, expressed in constant prices of 1990. The empirical results reveal that (1) at least for the period between 1985 and 1990, the effects of the non-competitive input structural changes in China on the primary energy requirements of Japan were negligible, and (2) the contribution of the Japanese final demand shifts on the total change in Chinese primary energy demand was 40 times larger than that of the Chinese final demand shifts on the primary energy requirements of Japan. The Japanese policy makers should concentrate on the energy impacts of the changes in the domestic production structure rather than the changes in the Chinese production structure.

Interregional Multipliers: Looking Backward, Looking Forward

Backward linkages are usually measured using output multipliers as based on the input matrix. Similarly, value-added and import multipliers are derived by additionally using the corresponding primary input coefficients. For measuring forward linkages, input multipliers have been frequently used. Within a 'supply-driven' input-output model, these multipliers are obtained from the output matrix. The present paper extends this notion by taking into account also the final output coefficients. This yields consumption, export and investment multipliers. In an empirical analysis, multipliers are calculated for an intercountry input-output table of six European Union (EU) countries. The multipliers are decomposed into intracountry effects, intercountry spillover effects and intercountry feedback effects. D'habitude, les liens en amont sont mesurés à partir des multiplicateurs de production basés sur la matrice des facteurs de production. De la même manière, des multiplicateurs de valeur ajoutée et d'importation sont aussi établis employant les coefficients des facteurs de production primaires correspondants. Afin de mesurer les liens en aval, on emploie souvent des multiplicateurs des facteurs de production. Au sein d'un modèle des échanges intersectoriels déterminé par l'offre, ces multiplacateurs proviennent de la matrice de la production. Cet article cherche à étendre cette notion en tenant compte des coefficients de la production finale. Il en résulte des multiplicateurs de consommation, d'exportation et d'investissement. A partir d'une analyse empirique, des multiplicateurs sont calculés pour un tableau d'échanges intersectoriels de six pays de l'Union européene (Ue). Les multiplicateurs sont désagrégés en effets qui se font au sein d'un même pays, et en effets de répartition et de redistribution qui se font entre les pays en question. Bereits bestehende Verknüpfungen werden gewöhnlich mit Hilfe von Ertragsmultiplikatoren gemessen, die sich auf die Aufwandsmatrix stützen. Mehrwert- und Importmultiplikatoren werden auf ähnliche Art und Weise durch zusätzliche Benutzung entsprechender Koeffizienten des Grundaufwands abgeleitet. Zur Messung voraussichticher Verknüpfungen sind oft Aufwandsmultiplikatoren eingesetzt worden. Ineinem 'lieferungsgetriebenen' Aufwands-Ertragsmodell erhielt man Multiplikatoren von der Ertagsmatrix. Der vorliegende Aufsatz erweitert diese Idee, indem er auch den Endertragskoeffizienten mit in Betracht zieht. Dies ergibt Verbrauchs-, Export- und Investierungsmultiplikatoren. In einer empirischen Analyse werden Multiplikatoren für eine interstaatliche Aufwands-Ertragstabelle von sechs EU Ländern berechnet. Die Multiplikatoren werden in innerstaatliche Auswirkungen, interstaatliche Überlaufsauswirkungen und interstaatliche Rückkoppelungswirkungen zerlegt.

How Japan–US Economic Interdependence Changed from 1985 to 1990: Some Findings from Price-adjusted MITI Intercountry Input–Output Tables

This paper consists of two parts. First, constant-price Japan–US intercountry input–output (IO) tables are compiled, based on Japan–US IO tables of the Ministry of International Trade and Industry (MITI) for 1985 and 1990, and the relative producer prices of both countries, which are estimated by the ‘peeling off’ method from OECD purchasing power parity data. Second, a factor decomposition analysis is carried out to show changes in Japan–US economic interdependence between 1985 and 1990. The Leontief inverse matrices of intercountry IO tables are decomposed into three matrices, which reflect domestic repercussion effects, spillover effects to the other country and feedback effects of own final demand from the other country. Then, a traditional decomposition analysis of changes in production for both countries is applied to see how both countries' economic interdependence changed. It is found that Japan–US economic interdependence moved from a pattern of Japan's dependence on the US to an almost equally interdependent pattern, although the degree of dependence was still higher in Japan in 1990. At the same time, there are significant industrial structural changes in the relationship between both countries, as a result of the significant appreciation of the yen relative to the dollar from 1985 to 1990.

The Asian Economy: Trade Structure Interpreted by Feedback Loop Analysis

The recent discussions that focused on the problems of the Uruguay Round of the General Agreement on Tariffs and Trade [GATT] together with the emergence of strengthened and expanded free trade areas [such as NAFTA, European Union and MERCOSUL/MERCOSUR] have created the need for careful analysis of the nature of internal and external dependence among nations and, within any nation, among the constituent regions. The picture that is obtained from inspection of import and export flows is only one (and often the smaller) part of the nature of dependence; there is a need to consider the indirect effects and, in addition, the possible feedbacks that may accrue from expansion of links between any two countries rippling through a broader set of economies and returning to expand activity in the originating economy. However, until recently, a dearth of data precluded the type of analysis conducted here; the development of consistent intercountry input-output tables for Europe enabled the first attempt at an understanding of intercountry dependencies (see Sonis, Oosterhaven and Hewings, 1993). This paper will explore similar perspectives with a set of Asian intercountry input-output tables for 1985. In this paper, some new perspectives are advanced that provide a more comprehensive view of the interactions between the economies of Asia. The analysis focuses on the potential for uncovering alternative perspectives about the role of linkages and multipliers in input-output systems. The analysis draws on some pioneering work by Miyazawa in the identification of internal and external multiplier effects. Paths of direct and indirect dependency are revealed as well as the nature and strength of feedback loops. In addition, some potential exists for contibutions to the debate raised by Krugman (1991, 1993) on the role of regionalism versus multilaterialism. Using these methods, it is possible to provide insights into the way in which these economies are integrated, the strength of the integration and the potential consequences of action in one economy on the rest of the system. The analysis parallels some earlier work on the European economies and will provide the basis for future comparative analysis as updated tables are produced.