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Aggregation Bias in the Measurement of U.S. Global Value Chains

Author

Listed:
  • Aaron Flaaen
  • Fariha Kamal
  • Eunhee Lee
  • Kei-Mu Yi
Abstract
This paper measures global value chain (GVC) activity, defined as imported content of exports, of U.S. manufacturing plants between 2002 and 2012. We assesses the extent of aggregation bias that arises from relying on industry-level exports, imports, and output to establish three results. First, GVC activity based on industry-level data underestimate the actual degree of GVC engagement by ignoring potential correlations between import and export activities across plants within industries. Second, the bias grew over the sample period. Finally, unlike with industry-level measures, we find little slowdown in GVC integration by U.S. manufacturers.

Suggested Citation

  • Aaron Flaaen & Fariha Kamal & Eunhee Lee & Kei-Mu Yi, 2024. "Aggregation Bias in the Measurement of U.S. Global Value Chains," Working Papers 24-49, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:24-49
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    File URL: https://www2.census.gov/library/working-papers/2024/adrm/ces/CES-WP-24-49.pdf
    File Function: First version, 2024
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    More about this item

    Keywords

    global value chains; aggregation bias;

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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