Development of global inter-country inter-industry system for various policy perspectives
Globalization and international economic integration are not new phenomena. However, the recent evolution of global supply and procurement networks has significantly changed foreign dependencies both for inputs (imports) and outputs (exports). These important changes in global production systems challenge conventional statistics and databases provided by national statistics offices since these are no longer sufficient to provide adequate insights into policy discussions. The notable specification features of the global interindustry model developed in this thesis are summarized as follows: 1) Covers approximately 90% to 95% of global value added, exports, imports and production are available in the system for individual countries for time series between 1995 and 2011. 2) It is harmonized with the System of National Accounts, an international comparable accounting framework of economic statistics. Therefore, GDP, trade balances and final expenditures in the model of this thesis match the numbers officially published by national statistics agencies. 3) The direct purchases by non-residents and international transportation and trade margin structures are estimated at the sectoral level. To author’s knowledge, this is a unique methodology to link the statistical sources in purchases’ and basic prices. Without this methodological specification, a large part of the trade in services particularly for wholesale, water and air transportation and tourism expenditures on hotels and restaurants industries would be misallocated as is the case in many earlier inter-country (multi-regional) models. 4) The model is specifically designed to analyze the globalization impacts for different policy areas with important extensions to account for regional dimension (Chapter 3) and the role of firm heterogeneity on trade intensity (Chapter 4). The subsequent chapters of this dissertation detail the methodology for the compilation techniques used to develop the various types of international input-output (IIO) models to analyze the different policy areas described in Chapter 1. The second chapter describes the estimation procedure for developing a spatially extensive IIO model using to the maximum possible extent all available statistical data sources. This model is, therefore, capable of analyzing various policy areas discussed earlier. The third chapter is an extension of the model developed in the second chapter in the context of subnational regions. This extension allows regional planners to analyze the economic impact in the context of participation of regional economies in global production networks. The extension of the model in chapter 4 is particularly designed to analyze the Trade in Value Added (TiVA) indicators by introducing firm heterogeneity in the processing trade of manufacturing activities using examples from China and Mexico. This split in processing trade activities greatly enhances the understanding of the role and magnitude of empirical estimates of emerging regions where their primary tasks in production systems are assigned for the assembly of imported intermediate products. The final chapter provides a summary of this thesis and discusses the wide range of additional policy analyses directly conducted by author.
Input-Output, Globalization, Firm heterogeneity, Global production networks, Global value chains
University of Illinois - Urbana-Champaign
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University of Illinois at Urbana-Champaign