Measuring Domestic Factor Content in Bilateral and Sectoral-Level Trade Flows
Author: Zhi Wang
Publisher:
Published: 2023
Total Pages: 0
ISBN-13:
DOWNLOAD EBOOKMeasuring country origins of factor content in bilateral or sector-level exports is important to understand evolution of regional and global value chains and the roles of individual country-sectors in these chains. This paper proposes a method to distinguish between measures based on backward and forward linkages and between net and gross factor content. It is consistent with the System of National Account Standard and has the adding-up property. In comparison, these properties do not hold for the "hypothetical extraction method" proposed by Los et al. (2016). We show a number of examples involving disaggregated trade in which the two methods diverge.