Measuring trade in value added: How valid is the proportionality assumption?

Arianto Patunru and Prema-chandra Athukorala

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: The validity of the ‘proportionality assumption’ made in estimating value added in exports using aggregate input-output tables is tested using separately compiled domestic- and imported-input matrices for Indonesia, Thailand, Malaysia, Taiwan, and Australia. The results show that the use of the proportionality assumption results in overestimation of value-added exports, and that the magnitude of the bias becomes amplified when the export composition of a country shifts from primary products to manufactured goods through integration into global production networks.

Keywords: trade in value-added; global production networks; input-output analysis (search for similar items in EconPapers)
JEL-codes: F13 F14 O19 O24 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2019
New Economics Papers: this item is included in nep-int and nep-sea
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Citations: View citations in EconPapers (1)

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Journal Article: Measuring trade in value added: how valid is the proportionality assumption? (2023)
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