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The WIOD database: Construction and first results on the factor content of trade

The WIOD database: Construction and first results on the factor content of trade. Robert Stehrer The Vienna Institute for International Economic Studies (wiiw) Robert.Stehrer@wiiw.ac.at WPTGS workshop, October 6, 2010 – OECD Paris Version: 2010-10-06.

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The WIOD database: Construction and first results on the factor content of trade

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  1. The WIOD database: Construction and first results on the factor content of trade Robert Stehrer The Vienna Institute for International Economic Studies (wiiw) Robert.Stehrer@wiiw.ac.at WPTGS workshop, October 6, 2010 – OECD Paris Version: 2010-10-06 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.

  2. 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

  3. 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)

  4. 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

  5. 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

  6. 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.

  7. Construction of International WIOT

  8. 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 NG D … direct factor input matrix of dimension F x NG Bilateral (NG x N) import matrix

  9. The bilateral factor content of trade • Factor 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

  10. Selected results: Net exports of EU-15 Trade in goods and services Trade in value added in mio US-$ in mio US-$

  11. Selected results: Structure of value added trade Exports Imports

  12. Selected results: Structure of value added tradenot including intra EU-15 trade Exports Imports

  13. Trade in value added by various factorsnot including intra EU-15 trade • Capital • ICT capital • Non-ICT capital • Labour • Low educated • Medium educated • High educated

  14. Trade in value added by various factors not including intra-EU trade

  15. Structure of net exports of VA by selected industries Textile and textile products (NACE 17 and 18) Leather and leather products (NACE 19)

  16. Structure of net exports of VA by selected industries Transport equipment (NACE 34 and 35) Electrical and optical equ. (NACE 30 to 33)

  17. Next steps Improving bilateral trade in services and trade in goods Improving 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 China Testing by users Available to consortium members Full availability in May 2012

  18. 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

  19. 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

  20. Comparisons to SIOT data Share ofimported intermediates in total imports NACE34 - Motor vehicles, trailersand semi-trailers 2000 2005

  21. Comparisons to SIOT data Share of imported intermediates in total imports NACE 35 - Other transport equipment 2005 2000

  22. Comparisons to SIOT data Share of imported intermediates in total imports NACE 18 – Wearing apparel, furs 2005 2000 Note different scales

  23. Product descriptions Productdescriptionsatdetailedlevelare not sufficienttodifferentiatebetweenusecategories Example: HS 6101 and 6105 6101  Men'sorboys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jacketsandsimilararticles, knittedorcrocheted, otherthanthoseofheadingNo 6103     6101 10  - Ofwoolorfineanimalhair              6101 20  - Ofcotton              6101 30  - Of man-madefibres              6101 90  - Ofother textile materials 6105  Men'sorboys' shirts, knittedorcrocheted    6105 10  - Ofcotton              6105 20  - Of man-madefibres              6105 90  - Ofother textile materials Country-specific adjustments, weights, etc. used by NSIs Additionally, specific problems for particular products (cars, light bulbs, etc.)

  24. 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

  25. 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

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