Application of factor decomposition techniques to vertical specialisation measurements

The increasing importance of vertical specialisation (VS) trade has been a notable feature of rapid economic globalisation and regional integration. In an attempt to understand countries’ depth of participation in global production chains, many Input-Output based VS indicators have been developed. However, most of them focus on showing the overall magnitude of a country’s VS trade, rather than explaining the roles that specific sectors or products play in VS trade and what factors make the VS change over time. Changes in vertical specialisation indicators are, in fact, determined by mixed and complex factors such as import substitution ratios, types of exported goods and domestic production networks. In this paper, decomposition techniques are applied to VS measurement based on the OECD Input-Output database. The decomposition results not only help us understand the structure of VS at detailed sector and product levels, but also show us the contributions of trade dependency, industrial structures of foreign trade and domestic production system to a country’s vertical specialisation trade.Developing countries, Developed countries, International trade, Input-output tables, Vertical specialisation, Factor decomposition, Input-output

Vertical specialisation indicator based on supply-driven input-output model

“Import content of exportsâ€, based on Leontief’s demand-driven input-output model, has been widely used as an indicator to measure a country’s degree of participation in vertical specialisation trade. At a sectoral level, this indicator represents the share of inter-mediates imported by all sectors embodied in a given sector’s exported output. However, this indicator only reflects one aspect of vertical specialisation – the demand side. This paper discusses the possibility of using the input-output model developed by Ghosh to measure the vertical specialisation from the perspective of the supply side. At a sector level, the Ghosh type indicator measures the share of imported intermediates used in a sector’s production that are subsequently embodied in exports by all sectors. We estimate these two indicators of vertical specialisation for 47 selected economies for 1995, 2000, 2005 using the OECD’s harmonized input-output database. In addition, the potential biases of both indicators due to the treatment of net withdrawals in inventories, are also discussed.Developing countries, Developed countries, Input-output tables, International trade, Vertical specialisation, Ghosh inverse, Supply-driven, Input-output

Vertical specialisation indicator based on supply-driven input-output model

“Import content of exports”, based on Leontief’s demand-driven input-output model, has been widely used as an indicator to measure a country’s degree of participation in vertical specialisation trade. At a sectoral level, this indicator represents the share of inter-mediates imported by all sectors embodied in a given sector’s exported output. However, this indicator only reflects one aspect of vertical specialisation – the demand side. This paper discusses the possibility of using the input-output model developed by Ghosh to measure the vertical specialisation from the perspective of the supply side. At a sector level, the Ghosh type indicator measures the share of imported intermediates used in a sector’s production that are subsequently embodied in exports by all sectors. We estimate these two indicators of vertical specialisation for 47 selected economies for 1995, 2000, 2005 using the OECD’s harmonized input-output database. In addition, the potential biases of both indicators due to the treatment of net withdrawals in inventories, are also discussed

Economic shocks and changes in global production structure : methods for measuring economic resilience

Conventional studies into the impacts of economic shocks using global input-output tables (sensitivity analyses) assume stable production structures and thus, only reveal the marginal impacts of changes in final demand. However, when economic shocks occur, whether at home or abroad, economic agents are expected to react to reduce the negative impact or amplify the positive effects. The ability of a country to contain economic losses can be defined as the resilience to economic shocks. Using the OECD\u27s annual Inter-Country Input-Output (ICIO) tables, 1995 to 2011, this paper investigates the relationship between changes in final demand and production structures for 61 economies. Our findings are summarized as follows. Production and final demand structures tend to change to reduce the negative feedbacks from final demand shocks. During economic downturns, structures tend to change so that the dependency on domestic services increases, while the dependency on domestic demand for goods, and the dependency on foreign demand for domestic goods and services, both decrease. Therefore, the domestic service sector seems to play a key role in temporarily containing the negative feedback. Countries that are able to prop up their economy by domestic service sectors instead of domestic goods and foreign sectors are more resilient to negative economic shocks

Measuring global value chains and regional economic integration : an international input-output approach

Firms that are expanding their cross-border activities, such as vertical specialization trade, outsourcing, and fragmentation productions, have brought dramatic changes to the global economy during the last two decades. In an attempt to understand the evolution of the interaction among countries or country groups, many trade-statistics-based indicators have been developed. However, most of these statistics focus on showing the direct trade-specific-relationship among countries, rather than considering the roles that intercountry and interindustrial production networks play in a global economy. This paper uses the concepts of trade in value added as measured by the input–output tables of OECD and IDE-JETRO to provide alternative indicators that show the evolution of regional economic integration and global value chains for more than 50 economies. In addition, this paper provides thoughts on how to evaluate comparative advantages on the basis of value added using an international input–output model

Application of factor decomposition techniques to vertical specialisation measurements

The increasing importance of vertical specialisation (VS) trade has been a notable feature of rapid economic globalisation and regional integration. In an attempt to understand countries’ depth of participation in global production chains, many Input-Output based VS indicators have been developed. However, most of them focus on showing the overall magnitude of a country’s VS trade, rather than explaining the roles that specific sectors or products play in VS trade and what factors make the VS change over time. Changes in vertical specialisation indicators are, in fact, determined by mixed and complex factors such as import substitution ratios, types of exported goods and domestic production networks. In this paper, decomposition techniques are applied to VS measurement based on the OECD Input-Output database. The decomposition results not only help us understand the structure of VS at detailed sector and product levels, but also show us the contributions of trade dependency, industrial structures of foreign trade and domestic production system to a country’s vertical specialisation trade

Estimating Trade Elasticities: Demand Composition and the Trade Collapse of 2008-09

This paper introduces a new methodology for the estimation of demand trade elasticities based on an import intensity-adjusted measure of aggregate demand, with the foundation of a stylized theoretical model. We compute the import intensity of demand components by using the OECD Input-Output tables. We argue that the composition of demand plays a key role in trade dynamics because of the large movements in the most import-intensive categories of expenditure (especially investment, but also exports). We provide evidence in favor of these mechanisms for a panel of 18 OECD countries, paying particular attention to the 2008-09 Great Trade Collapse.

Compilation of a regionally-extended inter-country input-output table and its application to global value chain analysis

Studies on the rise of global value chains (GVCs) have attracted a great deal of interest in the recent economics literature. However, due to statistical and methodological challenges, most existing research ignores domestic regional heterogeneity in assessing the impact of joining GVCs. GVCs are supported not only directly by domestic regions that export goods and services to the world market, but also indirectly by other domestic regions that provide parts, components, and intermediate services to final exporting regions. To better understand the nature of a country\u27s position and degree of participation in GVCs, we need to fully examine the role of individual domestic regions. Understanding the domestic components of GVCs is especially important for larger economies such as China, the US, India and Japan, where there may be large variations in economic scale, geography of manufacturing, and development stages at the domestic regional level. This paper proposes a new framework for measuring domestic linkages to global value chains. This framework measures domestic linkages by endogenously embedding a target country\u27s (e.g. China and Japan) domestic interregional input–output tables into the OECD inter-country input–output model. Using this framework, we can more clearly understand how global production is fragmented and extended internationally and domestically

DOCK2 is involved in the host genetics and biology of severe COVID-19

「コロナ制圧タスクフォース」COVID-19疾患感受性遺伝子DOCK2の重症化機序を解明 --アジア最大のバイオレポジトリーでCOVID-19の治療標的を発見--. 京都大学プレスリリース. 2022-08-10.Identifying the host genetic factors underlying severe COVID-19 is an emerging challenge. Here we conducted a genome-wide association study (GWAS) involving 2, 393 cases of COVID-19 in a cohort of Japanese individuals collected during the initial waves of the pandemic, with 3, 289 unaffected controls. We identified a variant on chromosome 5 at 5q35 (rs60200309-A), close to the dedicator of cytokinesis 2 gene (DOCK2), which was associated with severe COVID-19 in patients less than 65 years of age. This risk allele was prevalent in East Asian individuals but rare in Europeans, highlighting the value of genome-wide association studies in non-European populations. RNA-sequencing analysis of 473 bulk peripheral blood samples identified decreased expression of DOCK2 associated with the risk allele in these younger patients. DOCK2 expression was suppressed in patients with severe cases of COVID-19. Single-cell RNA-sequencing analysis (n = 61 individuals) identified cell-type-specific downregulation of DOCK2 and a COVID-19-specific decreasing effect of the risk allele on DOCK2 expression in non-classical monocytes. Immunohistochemistry of lung specimens from patients with severe COVID-19 pneumonia showed suppressed DOCK2 expression. Moreover, inhibition of DOCK2 function with CPYPP increased the severity of pneumonia in a Syrian hamster model of SARS-CoV-2 infection, characterized by weight loss, lung oedema, enhanced viral loads, impaired macrophage recruitment and dysregulated type I interferon responses. We conclude that DOCK2 has an important role in the host immune response to SARS-CoV-2 infection and the development of severe COVID-19, and could be further explored as a potential biomarker and/or therapeutic target