Document Type : Research Paper
Authors
Faculty of Economics, Allameh Tabataba'i University
Abstract
Given the increasing importance of economic globalization and the emergence of new theories of international trade, the role of intermediate goods in production processes and global value chains (GVCs) among various countries, both resource-rich and resource-poor, is of high significance in national economic accounts. This research aims to highlight this role in assessing countries’ shares in international trade. The primary objectives of this paper are, firstly, to analyze the relationship between Domestic Value Added (DVA) in gross exports and Vertical Specialization (VS) among 45 countries and, secondly, to compare traditional and modern methods of measuring countries’ shares in international trade. The data used include input-output tables for 43 countries for the year 2014, and data for Iran and Singapore for the years 2016 and 2015. The findings indicate that a negative relationship exists between the DVA/TGE ratio and the VS/TGE ratio, consistent with previous studies. Furthermore, the modern method, by separately considering domestic and foreign content in gross exports, provides a more accurate picture of countries’ trade situations due to its consideration of intermediate goods and the value added in production. In resource-rich countries, the DVA share is higher and the VS share is lower than the average, but this pattern is not observed in resource-poor countries. Iran, with a DVA share of 0.94 and a VS share of 0.06, respectively, ranks at the top and bottom of the 45 countries studied, indicating a weak connection to the global value chain and reliance on upstream activities.
Keywords
- Domestic Value-Added in Gross Exports
- Vertical Specialization
- International Trade
- Resource-Based Economies
- Non-Resource-Based Economies
Main Subjects
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