NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Characterizing Global Value Chains: Production Length and Upstreamness

Zhi Wang, Shang-Jin Wei, Xinding Yu, Kunfu Zhu

NBER Working Paper No. 23261
Issued in March 2017
NBER Program(s):International Trade and Investment

We develop a new set of country-sector level indicators of Global Value Chains (GVCs) characteristics in terms of average production length, and relative “upstreamness” on a production network, which we argue are better than the existing ones in the literature. We distinguish production activities into four types: those whose value added is both generated and absorbed within the country, those whose value-added crosses borders only once for consumption, those whose value added crosses borders only once for production, and those whose value added crosses borders more than once. Based on such an accounting framework, we further decompose total production length into different segments. Using these measures, we characterize cross-country production sharing patterns and their evolution for 56 sectors and 44 countries over 2000-2014. While the production chain has become longer for the world as a whole, there are interesting variations across countries and sectors.

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Document Object Identifier (DOI): 10.3386/w23261

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