Industry-level estimates of export quality accounting for global value chains

Area of Science:

• Economics
• International Trade
• Economic Geography

Background:

• Traditional export quality measures overlook the impact of imported intermediate inputs.
• Global supply chains are increasingly complex, influencing national economic performance.
• Accurate assessment of export quality is crucial for understanding international competitiveness.

Purpose of the Study:

• To develop a novel, industry-level dataset of export quality that incorporates global input-output linkages.
• To refine the measurement of a country's export quality by accounting for the quality of imported components.
• To provide a more accurate tool for analyzing international competitiveness and macroeconomic developments.

Main Methods:

• Linking conventional export quality measures with input-output tables.
• Developing a methodology to project out the quality of imported intermediate inputs from overall export quality.
• Constructing a dataset covering 76 countries and 21 industries.

Main Results:

• The novel export quality measure is positively correlated with countries' income per capita.
• The refined measure shows a positive correlation with industries' growth of value added.
• The dataset offers a more nuanced understanding of export quality in a globalized economy.

Conclusions:

• Accurate measurement of export quality, considering global value chains, is essential for economic analysis.
• This new dataset can enhance understanding of industry competitiveness and macroeconomic trends.
• The findings are particularly relevant given recent global supply chain disruptions and geopolitical shifts.