wiiw1

Wiener Institut für Internationale Wirtschaftsvergleiche

The Vienna Institute for International Economic Studies

www.wiiw.ac.at

Robert StehrerThe Vienna Institute for International Economic Studies (wiiw)Robert.Stehrer@wiiw.ac.at

WPTGS workshop, October 6, 2010 – OECD ParisVersion: 2010-10-06

The WIOD database: Construction and

first results on the factor content of trade

The WIOD-project is funded by the European Commission, Research Directorate General as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities, Grant Agreement no: 225 281.

wiiw2

WIOD project – www.wiod.org

Project funded within the 7th framework program of the EU- 10+OECD partners involved

Project started in May 2009 and ends in April 2012

Construction and applications- Construction of inter-country SUT/IO tables

- Data publicly available in May 2012

Should allow for a wide range of applications- Socioeconomic issues

- Environmental issues

- (Policy) Modelling

wiiw3

WIOD project – Data coverage

Inter-country Supply-Use and Input-Output tables- Benchmarked to NA data

Period: 1995-2006

40 countries included- EU-15 countries

- EU-12 countries

- NAFTA: Canada, USA, Mexico

- BRI: Brazil, Russia, India

- CHN: China

- OTHER: Turkey, Japan, South Korea, Taiwan, Indonesia, Australia

Sector and product classifications of SUTs- 59 products (corresponding to CPA)

- 35 industries (corresponding to NACE rev. 1)

wiiw4

WIOD project – Data coverage

Trade data- Goods trade (HS 6-digit – use category – CPA)

- Services trade (BoP codes)

Plus satellite accounts- Energy and environment

- Socio-economic indicators (capital and labour)

Deflated tables

wiiw5

Construction of International SUTs

1. Time-series of SUTs at purchasers’ prices Extrapolation and benchmarking of SUTs to National Accounts statistics, based

on SUT-RAS method

2. From SUTs at purchasers’ prices to basic prices Construction of net tax, trade and transport margin matrices

3. From national to inter-country SUTs Breakdown of USE table into domestic and imported (by supplying country)

Based on HS6 to end-use categorisation (improving on BEC)

Breakdown by supplying country differentiated by use categories

In later stage use import tables from NSIs if available

Rest of World: exports to RoW is calculated as residual and can become negative

wiiw6

Construction of International WIOT

4. From SUTs to inter-country input-output table Technology assumptions (on product sales or production)

5. From current price to constant price tables National deflators based on industry gross output deflators, and row wise

deflation of SUT. At later stage add in more information from national accounts International deflators (PPPs): World Bank ICP expenditure PPPs adjusted and

allocated to industries (for 2005)

For details see documentation on WIOD webpage: A.A. Erumbam, R. Gouma, B. Los, R. Stehrer, U. Temurshoev, M. Timmer, and G. de Vries (2010): World Input-Output

Database: Construction and Applications.U. Temurshoev and Timmer (2009): SUT-RAS procedure.J. Francois and O. Pindyuk (2010): WIOD service trade data.J. Pöschl and R. Stehrer (2010): WIOD goods trade data.

wiiw7

Construction of International WIOT

Final domestic

use

Final domestic

use

Final domestic

use

Intermediate use

Intermediate use

Intermediate use

Country B

Final use of domestic

output

Rest of World

Final use by RoW of

exports from A

Final use by RoW of

exports from B

Output in RoW

Final use by B of exports

from A

Final use of domestic

output

Final use by B of exports from RoW

Country ACountry B

Industry

Intermediate use by B of

imports from RoW

Rest of World

Industry

Intermediate use by RoW of imports from

A

Intermediate use by RoW of imports from

B

Intermediate use of

domestic output

Country B

Rest of World (RoW)

Industry

Industry

Intermediate use of

domestic output

Industry

Country AOutput

in A

Final use of domestic

output

Total

Industry

Final use by A of exports

from B

Final use by A of exports from RoW

Intermediate use by B of

imports from A

Country A

Output in A

Value added

Output in B

Output in RoW

Intermediate use by A of

imports from B

Intermediate use by A of

imports from RoW

Intermediate use of

domestic output

Value added

Output in B

Value added

wiiw8

The bilateral factor content of trade(preliminary results)

Accounting for trade in intermediates(following Reimer, JIE 2006; Trefler and Zhu, JIE 2010)

N … Number of countries; G … Number of industries; F … Number of factors

Direct plus indirect factor input

A … coefficient matrix of dimension NG x NGD … direct factor input matrix of dimension F x NG

Bilateral (NG x N) import matrix

1)( AIDB

T

wiiw9

The bilateral factor content of tradeFactor content of trade for country c

Diagonalization of results in • Bilateral trade matrix for factor allowing for

• Bilateral and sector specific calculations• Focus on bilateral factor services flows

NOTE:• ROW not included in calculations• Results are preliminary as partly relying on imputed values

cc Btf ct

kT k

wiiw10

Selected results: Net exports of EU-15

Trade in goods and services Trade in value addedin mio US-$ in mio US-$

wiiw11

Selected results: Structure of value added trade

Exports Imports

wiiw12

Selected results: Structure of value added trade

not including intra EU-15 trade

Exports Imports

wiiw13

Trade in value added by various factors

not including intra EU-15 trade

• Capital•ICT capital•Non-ICT capital

• Labour• Low educated• Medium educated • High educated

wiiw14

Trade in value added by various factors

not including intra-EU trade

wiiw15

Structure of net exports of VA by selected industries

Textile and textile products(NACE 17 and 18)

Leather and leather products(NACE 19)

wiiw16

Structure of net exports of VA by selected industries

Transport equipment(NACE 34 and 35)

Electrical and optical equ.(NACE 30 to 33)

wiiw17

Next steps

Improving bilateral trade in services and trade in goodsImproving breakdown by use categories (see below)

Comparing our use-classification of trade flows with official import IO tables.

Improving factor input data for non-OECD countries as part of work by World KLEMS consortium

Constant price series National deflators

Purchasing power parities for output and intermediate inputs

Volume masures of labour and capital

Processing export trade tables for Mexico and ChinaTesting by users

Available to consortium members

Full availability in May 2012

wiiw18

Appendix: Use categories and proportionality assumptions

Breakdown of imports by use categories

- Based on trade data (revised BEC correspondence)

- Based on information from existing import tables

Breakdown of each cell by country of origin

- Differentiated for intermediates, final consumption and gross fixed capital formation

wiiw19

Comparisons of use breakdown

Use existing import USE or SIO tables

- Eurostat

- OECD

Shares of imported intermediates in total imports

- Compare to BEC or BEC-WIOD categorisation

wiiw20

Comparisons to SIOT data

AUTBELDEU

DNK

ESP

EST

FIN

FRA

GRC

HUN

IRL

ITA

LTU

LVANLD

POL

PRT

ROM

SVK

SVN

SWE

0.0

0.2

0.4

0.6

0.8

1.0

Shar

es fr

om IO

dat

a

0 .2 .4 .6 .8 1Shares from trade data

Share of imported intermediates in total importsNACE 34 - Motor vehicles, trailers and semi-trailers

2000

AUTDEU

DNK

ESP

EST

FIN

FRA

GRC

HUN

ITANLD

PRT

ROM

SVN

SWE

0.0

0.2

0.4

0.6

0.8

1.0

Shar

es fr

om IO

dat

a

0 .2 .4 .6 .8 1Shares from trade data

2005

wiiw21

Comparisons to SIOT data

Share of imported intermediates in total imports

NACE 35 - Other transport equipment 2000 2005

AUT

BEL

DEU

DNK

ESP

EST

FIN

FRA

GRC

HUNIRL

ITA

LTU

LVA

NLD

POL

PRT

ROMSVKSVN

SWE

0.0

0.2

0.4

0.6

0.8

1.0

Shar

es fr

om IO

dat

a

0 .2 .4 .6 .8 1Shares from trade data

AUT

DEUDNK

ESP

EST FIN

FRA

GRC

HUNITA

NLDPRT

ROMSVN

SWE

0.0

0.2

0.4

0.6

0.8

1.0

Shar

es fr

om IO

dat

a

0 .2 .4 .6 .8 1Shares from trade data

wiiw22

Comparisons to SIOT dataShare of imported intermediates in total imports

NACE 18 – Wearing apparel, furs 2000 2005

DEU

LVA

BEL

GRC

HUN

SVK

LTU

EST

IRL

SVN

PRT

POLNLD

SWE

FIN

ROM

ITA

ESP

DNKAUT

FRA

0.0

0.2

0.4

0.6

Shar

es fr

om IO

dat

a

0 .02 .04 .06 .08 .1Shares from trade data

PRT

NLD

SVN

FINHUN

ESP

GRC

EST

ROM

DEU

SWE

ITA

FRA

DNKAUT

0.0

0.1

0.2

0.3

0.4

Impo

rt sh

ares

from

IO d

ata

0 .02 .04 .06 .08 .1Import shares from trade data

Note different scales

wiiw23

Product descriptions

Product descriptions at detailed level are not sufficient to

differentiate between use categories

Example: HS 6101 and 6105

6101  Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, knitted or crocheted, other than those of heading No 6103     6101 10  - Of wool or fine animal hair               6101 20  - Of cotton               6101 30  - Of man-made fibres               6101 90  - Of other textile materials

6105  Men's or boys' shirts, knitted or crocheted     6105 10  - Of cotton               6105 20  - Of man-made fibres               6105 90  - Of other textile materials

Country-specific adjustments, weights, etc. used by NSIs

Additionally, specific problems for particular products (cars, light

bulbs, etc.)

wiiw24

Conclusions

Give weights to use categories

Further improvements by including information from existing

import tables

- Breakdown into use categories

- Allocation of intermediate product over using industries

wiiw25

Comments to ...

Robert Stehrer

The Vienna Institute for International Economic Studies – wiiw

www.wiiw.ac.at

Robert.Stehrer@wiiw.ac.at

The WIOD project: www.wiod.org