tables were used by OECD and WTO to release their first set of Trade in Value-Added (TiVA) indicators in January 2013.

- In order to cover additional countries where no official input-output tables are available, other projects use alternative sources and estimate missing data. The Global Trade Analysis Project (GTAP) database includes social accounting matrices which were used, for example, by Koopman, Powers, Wang and Wei (2011) to provide measures of trade in value-added terms. The forthcoming World Bank dataset of trade in value added is also based on GTAP. Developed by Francois, Manchin, and Tomberger (2012), it covers about 100 countries that allow exploiting social accounting matrices spanning intermittent years from 1992 to 2007 to construct country-specific measures of the direct and indirect contribution of goods and services to the value added contained in a given country’s domestic production and exports. Specifically, the dataset contains two matrices, a domestic value added table and an export value added table, which allow the identification of the value added contribution of particular inputs to sectors that either sell the final good to the domestic market or export it.

- Lastly, inter-country and industry information can be found in the Eora global multi-region input-output (MRIO) tables produced by the University of Sydney and funded by the Australian Research Council. The Eora MRIO brings together a variety of primary data sources which are combined in a single dataset using interpolation and estimation techniques to provide a contiguous, continuous dataset for the period 1990-2010. Because the project focuses on environment issues, there are important deviations from observed trade flows and GDP and the tables are balanced to match principally data from large economies. The Eora MRIO was used by UNCTAD to produce trade in value-added indicators in a report released in February 2013.

All these databases allow for the estimation of the source(s) of value (domestic vs. foreign and/or by country and industry) that is added in producing goods and services for export. They recognize that growing global value chains means that a country's exports increasingly rely on significant intermediate imports (i.e., value added by industries in upstream countries).

Inter-country input-output tables can also be used to develop measures of the importance of GVCs in countries and industries, as recently done by the OECD.

# _Principal indicators based on input-output data_

The measure of the importance of GVCs in countries and industries could be summarized under three headings (OECD, 2012b):

# **(1)** **<u>The country’s participation in GVCs</u>**

The question is to what extent the country is involved in vertically fragmented production, both as a user of foreign inputs for its own exports (measured as the value of imported inputs in the overall exports of a country) and as a supplier of intermediate goods or services used in other countries’ exports (measured as the percentage of exported goods and services used as inputs to produce other countries’ exports). Both measures could be combined in a “participation” index developed by Koopman, Powers, Wang and Wei (2011) and quantified for 57 countries worldwide in OECD (2012b). Conceptually, this index can broadly be considered a GVC-specific measure of trade openness. The higher the foreign value added embodied in gross exports and the higher the value of inputs exported to third countries and used in their exports, the higher the participation of a given country in the value chain.

The OECD (2012b) results suggest that country size – in particular relative to regional peers – appears to matter. Both in advanced and emerging economies, smaller countries such as the Slovak Republic, Belgium, the Czech Republic, Chinese Taipei, and Singapore post participation rates between 60% and 80% (Figure 6). By contrast large countries’ participation is lower. The participation of middle-sized emerging countries such as Brazil, Mexico and Turkey is between 40% and 50%. The index for China (44%) is relatively low, comparable to Japan and the USA. This reflects both a lower Chinese value added in third countries’ exports as well as a lower foreign value added in 10