 wiiw 1 Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies Robert Stehrer The Vienna Institute for International Economic Studies (wiiw) WPTGS workshop, October 6, 2010 – OECD Paris Version: The WIOD database: Construction and first results on the factor content of trade 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:

 wiiw 2 WIOD project –  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

 wiiw 3 WIOD project – Data coverage  Inter-country Supply-Use and Input-Output tables -Benchmarked to NA data  Period:  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)

 wiiw 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

 wiiw 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

 wiiw 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.

 wiiw 7 Construction of International WIOT

 wiiw 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

 wiiw 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

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

 wiiw 11 Selected results: Structure of value added trade Exports Imports

 wiiw 12 Selected results: Structure of value added trade not including intra EU-15 trade Exports Imports

 wiiw 13 Trade in value added by various factors not including intra EU-15 trade Capital ICT capital Non-ICT capital Labour Low educated Medium educated High educated

 wiiw 14 Trade in value added by various factors not including intra-EU trade

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

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

 wiiw 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

 wiiw 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

 wiiw 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

 wiiw 20 Comparisons to SIOT data Share of imported intermediates in total imports NACE 34 - Motor vehicles, trailers and semi-trailers

 wiiw 21 Comparisons to SIOT data Share of imported intermediates in total imports NACE 35 - Other transport equipment

 wiiw 22 Comparisons to SIOT data Share of imported intermediates in total imports NACE 18 – Wearing apparel, furs Note different scales

 wiiw 23 Product descriptions  Product descriptions at detailed level are not sufficient to differentiate between use categories Example: HS 6101 and Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, knitted or crocheted, other than those of heading No Of wool or fine animal hair Of cotton Of man-made fibres Of other textile materials 6105 Men's or boys' shirts, knitted or crocheted Of cotton Of man-made fibres Of other textile materials  Country-specific adjustments, weights, etc. used by NSIs  Additionally, specific problems for particular products (cars, light bulbs, etc.)

 wiiw 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

 wiiw 25 Comments to... Robert Stehrer The Vienna Institute for International Economic Studies – wiiw The WIOD project: