NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

A Portrait of Trade in Value Added over Four Decades

Robert C. Johnson, Guillermo Noguera

NBER Working Paper No. 22974
Issued in December 2016
NBER Program(s):International Finance and Macroeconomics, International Trade and Investment

We combine data on trade, production, and input use to document changes in the value added content of trade between 1970 and 2009. The ratio of value-added to gross exports fell by roughly 10 percentage points worldwide. The ratio declined 20 percentage points in manufacturing, but rose in non-manufacturing sectors. Declines also differ across countries and trade partners: they are larger for fast growing countries, for nearby trade partners, and among partners that adopt regional trade agreements. Using a multi-sector structural gravity model with input-output linkages, we show that changes in trade frictions play a dominant role in explaining all these facts.

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Document Object Identifier (DOI): 10.3386/w22974

Published: Robert C. Johnson & Guillermo Noguera, 2017. "A Portrait of Trade in Value-Added over Four Decades," The Review of Economics and Statistics, vol 99(5), pages 896-911. citation courtesy of

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