Estimating Extended Supply-Use Tables in Basic Prices with Firm Heterogeneity for the United States: A Proof of Concept Lin Z. Jones and Zhi Wang (USITC) James J. Fetzer, Thomas F. Howells III, Erich H. Strassner (BEA) The Fourth World KLEMS Conference Madrid, Spain May 23-24, 2016

Supply-Use Tables (SUTs), firm heterogeneity, and extended SUTs Outline Supply-Use Tables (SUTs), firm heterogeneity, and extended SUTs A proof of concept analysis Trade in Value Added With and without firm-level heterogeneity 2016 Work plan and Beyond BEA next steps Collaborations with other partners

1. SUTs, Firm heterogeneity, and Extended SUTs

Supply-Use Tables for the United States Better harmonization with international guidelines to improve cross-country comparisons for global value chain analysis Released in September, 2015 in BEA’s Survey of Current Business http://bea.gov/scb/toc/0915cont.htm 71 industry/product detail; revised with subsequent annual revisions

SUT Methodology Built off balanced, Make-Use tables http://bea.gov/scb/toc/0214cont.htm A rearrangement of existing data to conform to the Supply-Use framework New methodological work in separating taxes on products from other taxes on production to derive basic valuation Tax data comes from both federal and state and local tax authorities Valuation of imports required new tabulations of existing data from customs records

Dimensions of firm heterogeneity OECD Proposal Source: OECD Expert Group on Extended Supply-Use Tables: Terms of Reference BEA Proposal

Proof of Concept Analysis on Firm Heterogeneity Use tabulations from tax returns for all U.S. firms and BEA’s MNEs; decompose gross output Globally-engaged MNEs and entirely domestic firms Fetzer and Strassner: http://bea.gov/papers/working_papers.htm To motivate longer-run BEA-Census link project on extended SUTs BEA/USITC proof of concept on extended SUTs and TiVA Merge firm heterogeneity project with U.S. SUTs Incorporate modeling on basic price valuation Produce extended SUTs with heterogeneity for 33 OECD industries and 35 products; develop associated TiVA indicators

Supply Table Supply Primary Manufacturing Services Imports Commodity Supply 932,835 681 5,496 413,425 1,352,437 30,908 5,560,845 38,963 1,649,390 7,280,106 18,626 289,409 20,164,394 200,292 20,672,721 Special 4,668 8,552 220,749 233,969 Industry Output 982,370 5,855,603 20,217,405 2,483,856 29,539,233

Supply Table- break down by MNE Primary Manufacturing Services Imports Commodity Supply Domestic MNE Foreign MNE Domestic 102,770   177 186 103,134 55,927 180 104 56,211 774,138 324 5,205 779,667 413,425 5,590 2,193,731 6,859 2,206,180 3,246 936,219 3,000 942,465 22,072 2,430,895 29,104 2,482,071 1,649,390 3,015 106,170 3,320,068 3,429,252 1,731 34,961 1,033,608 1,070,300 13,880 148,278 15,810,718 15,972,877 200,292 Special 1,446 119 1,564 767 25 793 2,455 8,408 10,863 220,749 Industry Output 111,376 60,904 810,090 2,301,523 972,127 2,581,952 3,327,231 1,036,737 15,853,436 2,483,856 29,539,233

Use Table Use Primary Manufacturing Services Final Demand Exports Total Use 121,485 852,477 97,158 197,316 84,002 1,352,437 84,739 1,746,143 1,284,368 3,222,579 942,277 7,280,106 193,491 1,159,892 6,395,313 12,077,741 846,284 20,672,721 Special -4,855 26,581 61,255 -50,967 201,956 233,969 Total Intermediates 394,860 3,785,093 7,838,093   12,018,046 Value Added 587,510 2,070,510 12,379,312 Industry Output 982,370 5,855,603 20,217,405 15,446,669 2,074,518 29,539,233

Use Table- Break Down by MNE Primary Manufacturing Services Final Demand Exports Total Use Domestic MNE Foreign MNE Domestic 513 275 6,761 21,207 8,450 26,324 1,222 703 8,839 22,675 6,165 103,134 283 158 3,228 10,977 4,518 14,168 701 406 5,005 12,246 4,521 56,211 2,867 1,115 80,534 182,555 60,550 177,544 5,275 2,992 41,032 151,888 73,316 779,667 Imports 2,440 907 22,404 90,287 34,097 221,800 4,974 2,050 23,958 10,507   413,425 638 256 18,904 203,359 95,236 146,094 30,877 11,033 263,017 1,081,469 355,297 2,206,180 322 149 8,113 97,745 54,033 74,221 10,717 4,143 118,416 379,590 195,016 942,465 982 402 26,531 217,581 106,008 255,685 53,128 19,048 465,087 945,656 391,964 2,482,071 9,803 6,484 12,154 190,217 165,206 140,758 100,796 80,839 127,268 815,864 1,649,390 2,603 1,306 43,721 97,343 40,544 116,771 404,804 136,712 1,050,261 1,398,120 137,066 3,429,252 844 431 14,978 35,336 14,475 40,774 105,008 36,888 303,854 430,306 87,406 1,070,300 6,910 3,507 111,956 306,178 126,834 347,572 790,022 295,079 3,127,681 10,235,327 621,812 15,972,877 388 95 6,753 3,085 830 30,150 7,194 2,472 135,338 13,988 200,292 Special -85 -46 -993 141 279 266 -1,221 -578 -4,815 2,361 6,256 1,564 -43 -23 -503 72 134 -618 -292 -2,439 1,194 3,169 793 -448 -243 -5,211 2,898 2,088 4,053 7,107 384 -3,436 -188,861 192,531 10,863 119 50 2,572 505 253 15,751 1,060 531 65,571 134,339 220,749 Total Intermediates 28,135 14,822 351,903 1,459,485 713,542 1,612,066 1,521,046 592,410 5,724,637 12,018,046 Value Added 83,240 46,082 458,187 842,038 258,586 969,886 1,806,185 444,327 10,128,800 Industry Output 111,376 60,904 810,090 2,301,523 972,127 2,581,952 3,327,231 1,036,737 15,853,436 15,446,669 2,074,518 29,539,233

2. Trade in Value Added

The Share of Domestic Value Added in U.S. Gross Exports 2011: Domestic value: 85.5% Foreign value: 14.5%

The Shares of Domestic Value Added in U. S The Shares of Domestic Value Added in U.S. Gross Exports by Sector, 2011 Mining/extraction Transportation services National average: 85.5% manufacturing services

The Shares of Domestic Value Added in U. S The Shares of Domestic Value Added in U.S. Gross Exports by Manufacturing Sector, 2011

Domestic Value Added Share of Gross Exports

The Shares of Direct and Indirect Domestic Value Added in U. S The Shares of Direct and Indirect Domestic Value Added in U.S. Gross Exports by Manufacturing, 2011

Direct and Indirect Domestic Value Added in Exports by Firm Type

3. 2016 U.S. Work Plan and Beyond

U.S. Work Plan Moving Forward Time-series SUTs Basic value domestic and import Use tables; ISIC/CPC tables Firm-level heterogeneity and extended tables BEA-Census Microdata link project Enhancements to international trade data Efforts to reconcile bilateral asymmetries and to expand services detail by product and country North America Regional SUTs and TiVA database 2018 for NA tables and TiVA statistics; 2020 for extensions The 2nd APEC Capacity Building and Technical Assistance Workshop – October 2016