8. * Analytical focus is limited to a particular
product/firm. Not appropriate for economic
analyses at the national level.
* Firm-level data does not explicitly present
“compensation of employees”.
* The approach only considers the value-added
structure of direct input suppliers (the first tier).
Weakness of “firm-level” approach
→ International Input-Output Analysis
16. 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000
China
Japan
Korea
Traditional measurement
Value-added measurement
Million US$
33%
The US trade deficits:
Traditional vs value-added measurement
17. Trade in Value-added
measures
international trade as
a transfer of employment
opportunities.
a transfer of CO2 emission
(carbon footprints).
a flow of values
rather than of products.
18. Trade in value-added approach
• offers a better measurement of bilateral
trade in the world of increasing production
sharing among countries.
• can be a core apparatus for linking trade
policies to crosscutting economic and/or
social issues like job creation, poverty
alleviation, and energy and environmental
planning.
22. Ind A Ind EInd DInd CInd B
(3)(1) (2) (4)
Ind C
Ind B
Ind C
Ind E
Ind D
Ind D
Ind E
Ind E
Ind D
(1)
(2)
(1)
(3)
(4)
(3)
(2)
Industry A
→Industry E
23. Ind EInd DInd CInd BInd A
(4)
(4)(2)(1) (3)
Ind C
Ind B
Ind C
Ind E
Ind D
Ind D
Ind E
Ind E
Ind D
(1)
(2)
(1)
(3)
(3)
(2)
Industry A
→Industry E
l(2) = 50%
l(4) = 10%
l(3) = 30%
l(4) = 10%
lae = 1 x 0% + 2 x 50% + 3 x 30%
+ 4 x (10+10)% + 5 x 0% + …= 2.7
Weighted average of the number of
production stages in supply chains.= The length of supply chains