Intermediate Imported Inputs Matter
Intermediate Imported Inputs Matter

Author: Can Erbil

Publisher:

Published: 2004

Total Pages: 0

ISBN-13:

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Over half of international trade occurs in intermediate inputs. This paper shows a reversal in policy recommendations for opening up the economy when imported intermediates are included in the model explicitly instead of assuming that all imports are final goods. In a "simple" model, where imports are treated as final goods high trade taxes shift the consumption away from imported goods towards domestically produced goods. In the "advanced" model, where imports can be both, final goods and intermediates, trade taxes impose distortion not only on the consumption side but also on the production side. High trade taxes distort the production by causing a shift away from imported intermediates toward domestic intermediates. Therefore, it is intuitive that in the "advanced model" trade taxes generate more distortion. This paper tests this intuition by employing two sets of CGE models for six different countries. The switch from the "simple" to the "advanced" model generates a reversal in policy recommendations regarding trade liberalization. Implications of this paper are of special interest for modelers and institutions which provide policy recommendations.

Analyzing the U.S. Content of Imports and the Foreign Content of Exports
Analyzing the U.S. Content of Imports and the Foreign Content of Exports

Author: National Research Council

Publisher: National Academies Press

Published: 2006-04-27

Total Pages: 76

ISBN-13: 030910131X

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Mass media has frequently covered stories concerning "outsourcing" or the moving of U.S. jobs to foreign locations by U.S. multinational companies. More often than not this "outsourcing" is of benefit to the companies' owners and managers. The discussion has spilled over into the political debate with candidates for national office making statements and suggesting policies for dealing with the issue. Due to the fact that many companies have fragmented the production process, however, it is difficult to examine the effect of "outsourcing"- the transfer of a business function from inside a firm to an outside source, with no reference to borders of countries- and "offshoring"-the movement of jobs that had been in the United States to a foreign location, without regard to business ownership- on the U.S. as many imports contain U.S. parts and many exports contain foreign parts. In the current situation, Congress mandated a study by the National Research Council, which was undertaken by the Committee on Analyzing the U.S. Content of Imports and the Foreign Content of Exports under a contract with the U.S. Department of Commerce. Analyzing the U.S. Content of Imports and the Foreign Content of Exports presents the findings of the committee.The committee refers to the availability and quality of data on the foreign content of U.S. exports and the domestic content of U.S. imports as "the content question." This was not been an easy task as data on actual content simply do not exist.

Do All Imports Matter for Productivity? Intermediate Inputs Vs Capital Goods
Do All Imports Matter for Productivity? Intermediate Inputs Vs Capital Goods

Author: Mauro Caselli

Publisher:

Published: 2018

Total Pages: 25

ISBN-13:

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This paper looks at the question of how import activities and productivity are related. Using detailed production and cost data from a panel of Mexican manufacturing plants between 1994 and 2003, the paper is able to differentiate between two types of imports, materials (or intermediate inputs) and machinery and equipment (or capital goods), and to separately identify self-selection and learning effects of each type of imports at the plant level. The key findings are that there is evidence of both self-selection into importing and learning-by-importing, but not all imports seem to matter for productivity. Not only more productive plants tend to become importers of machinery and equipment rather than materials, but plants that start importing machinery and equipment also experience an increase in productivity, while the same does not occur when plants start importing materials. There is also evidence of productivity gains following entry into export markets and complementarities between exporting, importing materials and importing machinery and equipment. These findings seem to suggest that capital goods from abroad are more likely to embody technological improvements than intermediate inputs.

Imported Intermediate Inputs and Domestic Product Growth
Imported Intermediate Inputs and Domestic Product Growth

Author: Pinelopi Koujianou Goldberg

Publisher:

Published: 2008

Total Pages: 27

ISBN-13:

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New goods play a central role in many trade and growth models. We use detailed trade and firm-level data from a large developing economy--India--to investigate the relationship between declines in trade costs, the imports of intermediate inputs and domestic firm product scope. We estimate substantial static gains from trade through access to new imported inputs. Accounting for new imported varieties lowers the exact import price index for intermediate goods on average by an additional 4.7 percent per year relative to conventional gains through lower prices of existing imports. Moreover, we find that lower input tariffs account on average for 31 percent of the new products introduced by domestic firms, which implies potentially large dynamic gains from trade. This expansion in firms' product scope is driven predominately by international trade increasing access of firms to new input varieties rather than by simply making existing imported inputs cheaper. Hence, our findings suggest that an important consequence of the input tariff liberalization was to relax technological constraints through firms' access to new imported inputs that were unavailable prior to the liberalization.

Changing Patterns of Global Trade
Changing Patterns of Global Trade

Author: Nagwa Riad

Publisher: International Monetary Fund

Published: 2012-01-15

Total Pages: 87

ISBN-13: 1463973101

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Changing Patterns of Global Trade outlines the factors underlying important shifts in global trade that have occurred in recent decades. The emergence of global supply chains and their increasing role in trade patterns allowed emerging market economies to boost their inputs in high-technology exports and is associated with increased trade interconnectedness.The analysis points to one important trend taking place over the last decade: the emergence of China as a major systemically important trading hub, reflecting not only the size of trade but also the increase in number of its significant trading partners.

Calculating Trade in Value Added
Calculating Trade in Value Added

Author: Aqib Aslam

Publisher: International Monetary Fund

Published: 2017-08-07

Total Pages: 25

ISBN-13: 1484314484

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This paper sets out the key concepts necessary to calculate trade in value added using input-output tables. We explain the basic structure of an input-output table and the matrix algebra behind the computation of trade in value added statistics. Specifically, we compute measures of domestic value-added, foreign value added, and forward and backward linkages, as well as measures of both a country’s participation and position in global value chains. We work in detail with an example of a global input-output table for 3 countries each with 4 sectors, provided by the Eora Multi-Region Input-Output (MRIO) database. The aim is to provide an introduction to the analysis of global value chains for use in policy work. An accompanying suite of Matlab codes are provided that can be used with the full set of Eora MRIO tables.