of the sectors in the considered country (OWN), we can measure the extent of international sourcing from each of the 8 country groups.<sup>15</sup> 2. Export share towards intermediate input use: by dividing the value of production that is used as intermediate inputs in each of the 8 destination regions—shown in different columns of the IO table—with the total output of the sector, we can measure the extent of integration into GVCs as a supplier.

3. Export share towards foreign final demand: we similarly divide the export flows consumed as final demand in the eight regions with the sectoral output to measure the general outward orientation of different countries.

4. Domestic value added in gross exports: we use the extraction method proposed in Los, Timmer and de Vries (2016) to calculate the value added to export ratio (VAX) that was introduced by Johnson and Noguera (2012). We perform these calculations for the entire economy as well as for the manufacturing sector alone.

# **3.3 Patterns in international sourcing**

The first thing we document is to what extent each country sources intermediate inputs from abroad. Table A.2 in the Appendix list the shares for all countries and origins for the manufacturing industry in 2015. On average (using population weights to aggregate countries), local value added within the industry is 41% and 59% of the output value consists of purchased intermediates. By far the most important source of purchased inputs are the other industries within in the same country. On average they account for 45% of total output value or approximately three quarters of all purchased inputs. Together, local value added and domestically sourced intermediates account for 85% of the total value of the manufacturing industries in sub-Saharan Africa and only the remaining 15% is imported.

An important pattern to point out is that the results for some countries seem highly unbelievable. For several countries, the local value added share is implausibly low, e.g. for Tanzania (-2%), Somalia (3%), and Djibouti (7%), but it is difficult to know with certainty whether this reflects reality or not. Value added in the manufacturing sector of Cape Verde represents only 11% of the output value, but we cannot rule out that the type of industries they specialize in explains this low average. In some cases, for example for Somalia and Djibouti, the very low share of value added goes together with a very high share of domestically sourced inputs. It is possible that the nature of the industrial structure and vertical integration within the country explains these outliers.

At the other extreme, the value added share is extremely high in some countries, e.g. for Ethiopia (90%) and Nigeria (64%). We have double checked our calculations and we are certain that outlying coefficients are the result of unusual patterns in the underlying information from the MRIO and not a mistake in the aggregation procedure. In a few cases, there seem to be clear errors in the underlying data. For example, the sum of the value added

> 15 Together with the share of output that is accounted for by value added from the sector itself, all components combined sum to one.

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