Diapositiva 1

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The use
of trade data at the firm level for the analysis
of Global Value Chain (GVC) WPTGS Part II
Trade, Globalisation and competitiveness 6
October 2010 OECD, Paris
Natale Renato Fazio, Stefano Menghinello, Carmela
Pascucci and Carla Sciullo Foreign trade and
multinational enterprises statistics
Division ISTAT ITALY
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Structure of this presentation
.Global Value Chains (GVS) have emerged as a new
analytical framework for a better understanding
of the Globalisation of the industrybut can
we measure them? HOW FOREIGN TRADE DATA AT THE
FIRM LEVEL CAN CONTRIBUTE TO A QUANTITATIVE AND
IN DEPTH ASSESSMENT OF GVCs?

• List of issues covered by this presentation
• The measurement issue in GVC analysis
• The role played by foreign trade aggregated
  figures versus firm level data
• Is it feasible to develop GVC analysis using firm
  level foreign trade data?
• Some empirical examples
• Conclusions

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The measurement issue in GVC analysis

• Global Value chain (GVC) has emerged in the
  business literature as a new analytical
  framework. It clearly shows that not only
  multinational enterprises (MNEs) but also
  specialised suppliers are key actors of global
  production fragmentation
• It is closely linked to the globalisation of
  production filieres, international networks of
  production, etc. Indeed, this concept is very
  sophisticated and complex, since it also includes
  dimensions like market power, global governance,
  etc
• It is an intrinsically dynamic and genuinely
  firm level concept companies compete by
  continuously reshaping their position inside GVC
  
• Measurement of GVC is still an open issue.
  Aggregated indicators are based on foreign trade
  data and input output tables. Much of the firm
  level empirical evidence is based on qualitative
  assessment (case studies) or is model based with
  weak proxy variables.

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The role played by foreign trade aggregated
figures versus firm level data

• International trade data play a crucial role as
  aggregated figures in the development of GVC
  indicators
• These indicators are based on intra-industry
  trade, intra-firm trade, intermediates trade,
  trade unit values.
• However, these aggregated indicators cannot
  support more analytical and complex analysis
  addressing strategic issue like moving up in a
  GVC
• Firm level foreign trade data can support more
  complex and flexible analysis of GVC based on a
  trade operator perspective
• In particular, trade operator data are very
  detailed (single transaction data including good
  characteristics, partner country) and can be
  linked to business characteristics (business
  register) and economic performance indicators
  (Structural business statistics micro-data).
  Information on the foreign trade operator non
  resident partner is also a crucial asset to
  improve our knowledge of GVC
• The analysis of GVC exclusively based on
  foreign trade operators data is limited to a
  truncated production network where a resident
  company is engaged in trade linkages with foreign
  companies only as direct GVC partners.

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Is it feasible to develop GVC analysis using firm
level foreign trade data?

• Most EU member states have already developed
  figures on trade operator business
  characteristics. There is an ongoing Eurostat
  project with the goal of harmonising and
  expanding figures on business characteristics of
  trade operators. Some key non EU OECD countries,
  like US, have already developed similar figures.
• The basic framework to develop these new figures,
  based on the link between the trade operators
  register and the business register on all active
  resident companies, is usually available in most
  OECD countries.
• Further information can be exploited from this
  framework and finalised to the analysis of Global
  Value Chains
• A short-medium term goal can be the development
  of new figures on trade operators characteristics
  finalised to measure companies potentially
  engaged in GVCs This is essentially a data
  reclassification problem
• A long term goal will involve more analytical
  analyses of firm level foreign trade data
  addressing issues like market power and moving
  up in a value chain

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Some empirical examples

• The project is still at a very preliminary stage
  of development. So no robust analytical or
  policy implications can be inferred from what
  folllows. However, preliminary empirical results
  seem to be very interesting and can represent a
  relevant asset for the empirical analysis of GVC
• As a first step, we have essentially
  reclassified trade operators linked to business
  register characteristics grouping trade flows by
  MIG. Different business profiles of trade
  operators emerge from this analysis based on
  trade characteristics from both export and import
  sides.
• We focus on medium and large size companies (50
  plus person employed) actively engaged in
  external trade of intermediate goods from both
  exports and imports. We assume that these
  companies are potentially engaged in GVC
• We further expand this very preliminary analysis
  based on the dynamic of firm level export and
  import unit values for a sample of companies
  potentially engaged in GVC.

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Italian medium and large size firms potentially
engaged in Global value chains ( companies
active in trade of intermediate goods from both
exports and imports as a share of total M-L size
companies active in exports trade)
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Large and Medium size Italian firms active in
trade in intermediate goods by number of foreign
resident trade partners (intra-EU trade only)
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Firm level dynamic of export and import unit
values for a sample of Italian LM size firms
potentially engaged in GVS (unit value of the
combined nomenclature code that is dominant from
the export side in firm level trade of
intermediate goods)
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Firm level dynamic of export and import unit
values for a sample of Italian LM size firms
potentially engaged in GVS (unit value of the
combined nomenclature code that is dominant from
the export side in firm level trade of
intermediate goods)
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Conclusions

• Firm level foreign trade trade can significantly
  contribute to the empirical analysis of global
  value chains.
• Most OECD countries have already set up a
  statistical framework for the production of
  statistics on trade operators business
  characteristics.
• Based on an agreed methodology, additional
  figures focusing on companies potentially engaged
  in GVC can be easily developed from this
  framework as a data reclassification work
• More analytical work can be done based on firm
  level trade data in order to explore complex
  issues like moving up in a GVC
• Further developments in this area will include
  additional linkages between the register of
  foreign trade operators with both national based
  (SBS data and economic accounts from
  administrative data sources) and international
  data sources (for instance ORBIS for foreign
  resident trade partner characteristics and
  performance indicators). So we can link firm
  level trade data (including unit values) with
  value added.........