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Abstract

This paper first refines a methodology in KPWW (2011) that completely decomposes a country’s gross exports into its value-added components. By identifying which parts of such value-added are “double counted,” it bridges official trade statistics and national accounts, making the standard measure of trade consistent with SNA standards. We implement the decomposition on a database of global production and trade covering 62 countries/regions and 41 industries from version 8 of the Global Trade Analysis Project (GTAP) database for 2007 with additional processing trade information from China and Mexico. We recompute the RCA index at the country-sector level for all the countries and sectors in our database using domestic content in exports and compare them with RCA index based on traditional trade statistics.

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