Page 50 - Special Topic Session (STS) - Volume 2

STS452 Joseph M.

Using input-output tables to study trade and
international production sharing arrangements
Joseph Mariasingham
Asian Development Bank

Abstract
Economic globalization is increasingly being characterized by fragmented
production processes that are distributed internationally. As enterprises seek
to capitalize on factor cost differentials and the lowering of barriers to trade
and investment, cross-border transactions in intermediate products have
come to dominate international trade. Such internationalization of the
production process, however, poses a number of critical definitional and
measurement challenges and issues, as conventional approaches to
characterizing trade flows and presenting trade statistics have shown to be
inadequate in capturing the essential characteristics of international
production sharing. To fill this important analytical gap, a number of
multilateral institutions such as the Asian Development Bank (ADB) have taken
the initiative to produce input-output table based statistics and quantitative
analyses to complement basic trade statistics. This paper discusses such a
framework for producing statistics on international production sharing.

Keywords
Economic globalization; input-output analysis; international production
sharing.

1. Introduction
The principal sources of trade data are customs records. Goods that cross
territorial boundaries are recorded primarily as exports, re-exports, imports, or
re-imports at full value. Valuation methods are generally based on the
purchase price or cost of production. Trades in services are discerned through
an economy’s balance of payment accounts maintained by its central bank.
Deeper analysis of relevant data gathered through enterprise and trade
surveys could provide additional insights on origin and destination as well as
components of the traded commodities. Trade data in themselves do not
provide information on the effects of cross-border transactions on the
economy. The underlying issue is that trade data are recorded and presented
in gross value terms without any attempt to delineate the local and foreign
contents in the traded commodity or the contributions of different industrial
sectors to its production. Commodities are produced either completely locally
or by incorporating at least one non-local (imported) component (good or

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