OECD TRADE INDICATORS PROJECT Statistical analysis of international trade and production: towards a scoreboard of indicators Lelio Iapadre (University of LAquila and National Institute for Foreign Trade, Italy) Alessia Proietti (National Institute for Foreign Trade, Italy)

Background The OECD Handbook on Economic Globalisation Indicators (HEGI) The OECD Handbook on Economic Globalisation Indicators (HEGI) –The concept of economic globalisation and its measurement –Foreign direct investment –The economic activity of multinational enterprises –The internationalisation of technology –Aspects of trade globalisation The Trade Indicators Project (TIP): a survey of statistical indicators on international trade and production The Trade Indicators Project (TIP): a survey of statistical indicators on international trade and production –International integration –Policy restrictiveness –Performance and competitiveness –Structural indicators –Structural decomposition techniques Enterprise-related data Enterprise-related data –OECD Statistics on Enterprises by Size Class (SEC) –Eurostat pilot project on enterprise-related trade data

Targets Identifying a limited set of statistical indicators, based on their analytical and policy relevance Identifying a limited set of statistical indicators, based on their analytical and policy relevance Developing enterprise-related indicators, based on linkages between the existing statistical registers and databases on business international activities Developing enterprise-related indicators, based on linkages between the existing statistical registers and databases on business international activities Publishing a new statistical product on international trade and production Publishing a new statistical product on international trade and production

TIP products in 2003 A taxonomy of statistical indicators for the analysis of international trade and production A taxonomy of statistical indicators for the analysis of international trade and production A review of trade policy indicators A review of trade policy indicators New indicators for the analysis of intra-regional trade New indicators for the analysis of intra-regional trade

The Scoreboard on Economic Globalisation A final target and a framework for on- going projects A final target and a framework for on- going projects Co-ordination between different projects (HEGI, TIP, SEC) and OECD departments Co-ordination between different projects (HEGI, TIP, SEC) and OECD departments Co-operation with other institutions and research centres Co-operation with other institutions and research centres

Some examples: international performance and competitiveness indicators The taxonomy: The taxonomy: –Net trade indicators –Market shares –Price indicators –Composite indicators

Net trade performance indicators The normalized trade balance The normalized trade balance Z = (X – M) / (X + M) – 1 Z 1 – 1 Z 1 where: X = exports M = imports

Market shares The share of OECD exports The share of OECD exports S i = X i / Σ i X i 0 S i 1 0 S i 1 where: X i = exports of country i i = 1 … n OECD members

Competitiveness indicators The real effective exchange rate The real effective exchange rate q = E P / P* where: E = nominal effective exchange rate (foreign currency per unit of domestic currency) P = index of domestic prices P* = index of foreign prices

Some examples: structural indicators The taxonomy The taxonomy –Single-flow indicators of trade intensity and specialization –Net-trade indicators of specialization –Inter/Intra-industry trade intensity –Intra-firm trade indicators –Measures of similarity –Measures of concentration and diversification

Single-flow indicators of trade intensity and specialization The symmetric revealed comparative advantage index The symmetric revealed comparative advantage index SRCA ik = (RCA ik – 1) / (RCA ik + 1) RCA ik = (x ik / Σ k x ik ) / (x wk / Σ k x wk ) where: x ik = country is exports of product k x wk = world exports of product k

Net trade indicators of specialization The normalized share balance The normalized share balance NSB ik = [(x ik / Σ k x ik ) - (m ik / Σ k m ik )] / [(x ik / Σ k x ik ) + (m ik / Σ k m ik )] - 1 NSB ik 1 where: x ik = country is exports of product k m ik = country is imports of product k

The Grubel-Lloyd index of intra-industry trade Definition of intra-industry trade: balanced two-way trade in goods produced by the same industry Definition of intra-industry trade: balanced two-way trade in goods produced by the same industry –Inspiration: studies on trade bilateralism in the Thirties –Relation with measures of similarity

The Vona index of intra-industry trade Definition of intra-industry trade: two- way flows of goods produced by the same industry, independently of their balance Definition of intra-industry trade: two- way flows of goods produced by the same industry, independently of their balance The CEPII approach: the overlap threshold The CEPII approach: the overlap threshold

Measures of similarity The Finger-Kreinin index of similarity between trade distributions The Finger-Kreinin index of similarity between trade distributions FK ij = 1 – [½ Σ k |(x ik / Σ k x ik ) - (x jk / Σ k x jk )|] where: x ik = country is exports of product k x jk = country js exports of product k

Measures of concentration The Herfindahl index of export concentration by product The Herfindahl index of export concentration by product Hi =Hi =Hi =Hi =where: x ik = country is exports of product k

The need for enterprise- related statistics A clear understanding of phenomena such as intra-firm trade and international production networks requires enterprise-related data A clear understanding of phenomena such as intra-firm trade and international production networks requires enterprise-related data Available statistical sources Available statistical sources –The AFA and FATS databases –Enterprise-related trade statistics

Italian exports value by enterprise size

Italian exporting firms by number of markets

Conclusions Main features of the Scoreboard on Economic Globalization Main features of the Scoreboard on Economic Globalization –An integrated analysis of international trade and production –Emphasis on enterprise-related data –A user-friendly tool, giving access to a wide range of different data-bases –A laboratory for new data production techniques, based on linkages between different archives