@article{Muradov:332697,
      recid = {332697},
      author = {Muradov, Kirill},
      title = {Trade costs and borders in the world of global value  chains},
      address = {2016},
      year = {2016},
      note = {Presented at the 19th Annual Conference on Global Economic  Analysis, Washington DC, USA},
      abstract = {There is a growing body of statistical evidence of the  importance of value chains for the global economy. The  perception of longer value chains with more border  crossings raised concerns about multiple trade barriers and  associated costs. In the existing literature, however, the  investigations of the accumulation of trade costs through  the multi-stage production rarely extended beyond  illustrative examples. The likely reasons are poor data and  technical difficulties inherent in the newly developed  accounting methods that focus on value added flows  irrespective of border crossings. This paper proposes two  new approaches to quantify the accumulation of trade costs  along global value chains and a measure of the average  number of border crossings in value chains. These  approaches build on the inter-country input-output  accounting frameworks that trace gross trade flows backward  to their initial origin or forward to their ultimate  destination. Data from the World Input-Output Database are  supplemented with estimates derived from the UN Comtrade  and UN TRAINS, allowing for an experimental computation of  the accumulated import tariffs faced by exporters in 2001,  2005 and 2010. At the aggregate country and sector levels,  the accumulation of import tariffs is found to be pervasive  but moderate. The average number of border crossings  exhibits a slow upward trend, but the accumulated tariffs  decline quickly. Trade liberalization therefore neutralizes  the risk of higher cumulative protection associated with  the international fragmentation of production. The findings  suggest that the input-output accounting frameworks may  significantly extend the frontier of trade policy analysis  in the world of global value chains.},
      url = {http://ageconsearch.umn.edu/record/332697},
}