Ye, Xianjia

English

In dit proefschrift bestudeer ik mondiale waardeketens en de invloed ervan op internationale handel, de arbeidsmarkt en economische ontwikkeling. Vanwege de afgenomen kosten van vervoer en communicatie wordt een toenemend aantal producten gemaakt in mondiale waardeketens. Een land specialiseert zich in het uitvoeren van bepaalde taken en niet in het maken van producten. Bijvoorbeeld, een exporteur van elektronica kan een producent van geavanceerde elektronica zijn, of het land waar alleen de assemblage van de elektronica plaatsvindt. Het analyseren van data van geëxporteerde producten kan daarom misleidend zijn wanneer de identificering van daadwerkelijk uitgevoerde economische activiteiten belangrijk is. Ik vind dat het analyseren van handel in productiefactoren een beter perspectief biedt voor handelsanalyse. De handel in productiefactoren hangt nauw samen met de relatieve beschikbaarheid van productiefactoren tussen landen. Om soortgelijke redenen is voor de analyse van economische ontwikkeling de label van een industrie (bijvoorbeeld arbeids- of technologie-intensief) minder belangrijk dan de daadwerkelijke taken welke worden uitgevoerd door een land. Ontwikkelingslanden kunnen relatief gemakkelijk in de mondiale waardeketens van complexe producten participeren, maar meestal blijven zij laaggeschoolde taken uitvoeren terwijl upgrading naar hooggeschoolde taken een heel verschillend en ander proces is. Door de mogelijkheid van het mondiaal uitbesteden van taken in waardeketens, is het nodig om data voor de hele waardeketen te verzamelen om daarmee de effecten van technologische verandering te evalueren. Automatisering en uitbesteding kunnen hetzelfde effect hebben op de binnenlandse vraag naar arbeid. Met alleen binnenlandse gegevens is het dus moeilijk om te identificeren of een taak is uitbesteed naar het buitenland, of dat het door technologie is gesimplificeerd. Met data over de activiteiten in mondiale waardeketens vind ik dat uitbesteding en technologie een kwantitatief vergelijkbaar effect hebben op de afgenomen vraag naar laaggeschoolde arbeid in ontwikkelde landen.This thesis analyses Global Value Chains (GVC) and its consequences for economic theories and methods. An increasing number of products are produced in GVCs, with tasks diffused across many countries. Countries specialize in certain tasks instead of finished products. The production and export of products is therefore not aligned with the tasks performed in each country. An exporter of electronics might be a manufacturer of sophisticated electronic components or just the country where low-skilled electronics assembly happens. Using gross exports data can be misleading in trade studies when the identification of actual economic activities is important. I argue that factor trade provides a better analytical perspective. I find that bilateral factor trade is strongly related to each country’s factor endowment, but gross exports are not. Similarly, when analyzing economic development, the label of an industry (e.g. labor- or technology-intensive) is less important compared to the actual tasks a country performs within that industry. I find that it is relatively easy for developing countries to join the GVCs of advanced products like electronics and automobile production by performing low-skilled tasks, but within-industry upgrading is different and quite difficult. Since production is now organized globally, information on all activities in a GVC are needed to analyze technological change. If one only uses data for the domestic economy, it is hard to tell whether a disappeared task is offshored or simplified by technology. Using GVC data we find that offshoring and technological change have quantitatively similar effects on reducing the demand for non-college employment in advanced countries

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   University of GroningenA global value chain perspective on trade, employment, and growthYe, XianjiaIMPORTANT NOTE: You are advised to consult the publisher's version (publisher's PDF) if you wish to cite fromit. Please check the document version below.Document VersionPublisher's PDF, also known as Version of recordPublication date:2017Link to publication in University of Groningen/UMCG research databaseCitation for published version (APA):Ye, X. (2017). A global value chain perspective on trade, employment, and growth. University of Groningen,SOM research school.CopyrightOther than for strictly personal use, it is not permitted to download or to forward/distribute the text or part of it without the consent of theauthor(s) and/or copyright holder(s), unless the work is under an open content license (like Creative Commons).The publication may also be distributed here under the terms of Article 25fa of the Dutch Copyright Act, indicated by the “Taverne” license.More information can be found on the University of Groningen website: https://www.rug.nl/library/open-access/self-archiving-pure/taverne-amendment.Take-down policyIf you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediatelyand investigate your claim.Downloaded from the University of Groningen/UMCG research database (Pure): http://www.rug.nl/research/portal. For technical reasons thenumber of authors shown on this cover page is limited to 10 maximum.Download date: 05-06-2022     A Global Value Chain Perspective on Trade, Employment, and Growth  Xianjia Ye     给妈妈和爸爸 To My Parents Published by University of Groningen, the Netherlands Printed in the Netherlands by Ipskamp Printing B.V. Postbus 333, 7500AH Enschede ISBN 978-90-367-9901-0 (Paperback)   978-90-367-9900-3 (E-book) Copyright © 2017 by Xianjia Ye All rights reserved.  No part of this publication may be reproduced, stored in a retrieval system of  any nature, or transmitted in any form or by an means, electronic, mechanical,  now known or hereafter invented including photocopying or recording,  without prior written permission of the author.   Cover of the paperback “the observational equivalence”.Photo by the author on the dock of Ameland. A Global Value Chain Perspective on Trade, Employment, and GrowthProefschriftter verkrijging van de graad van doctor aan deRijksuniversiteit Groningenop gezag van derector magnificus prof. dr. E. Sterkenen volgens besluit van het College voor Promoties.De openbare verdediging zal plaatsvinden op dinsdag 20 juni 2017 om 11.00 uur door Xianjia Yegaenbtoirbeont stopbot 3I1am5not feburusaryi 11948298ptrei vaNciyngprbote,c Cthiona    PromotorProf. dr. M.P. Timmer CopromotorDr. G.J. de Vries BeoordelingscommissieProf. dr. M. Goos Prof. dr. D.S.P. Rao Prof. dr. S. Brakman  AcknowledgmentsI would like to first thank my parents who always support me from the beginning ofmy life. I am also thankful to the scholarship by Faculty of Economics and Businessin Groningen for my later half of bachelor and my master studies, without which Imost probably would not proceed in academia after obtaining my bachelor degree.I am in debt to my two supervisors, Marcel Timmer and Gaaitzen de Vries. Thisthesis is not possible without their great support. The innovative and stimulatingtalks with them helped me formulate the research ideas, and they also spent muchtime helping me in data issues as well as in writing. I want to thank Steven Brakman,Maarten Goos and Prasada Rao for the reading of my manuscript and the commentsfor further improvement. I also thank Gaaitzen and Shidan Lu for the editing on theDutch summary of my thesis, and Marianna Papakonstantinou being the paranymphfor my defense.We are also grateful to many national and international colleagues, including butnot limited to Ingvild Almås, Roberto Bonfatti, Steven Brakman, Angus Deaton, ErikDietzenbacher, Erwin Diewert, Giovanni Dosi, Robert Feenstra, Maria Garcia Vega,Ejaz Ghani, Maarten Goos, Marco Haan, Jonathan Haskel, Robert Johnson, DaleJorgenson, Mariko Klasing, Bart Los, Knox Lovell, Filip Matĕjka, Branko Milanov́ıc,Petros Milionis, Peter Neary, Prasada Rao, Robin Sickles, Dirk Stelder, Yan Xu,Christopher Zuber, for their precious discussions and comments on our papers inseminars, conferences and other occasions.I had a good time in the “FDI and Trade” teaching team with Tarek Harchaoui,Beppo van Leeuwen, Bart Los, and Dimitrios Soudis. I want to also thank CeciliaPlottier and Stefan Pahl for being great officemates. The acknowledgment also goesto our proud secretaries – the Gemmies – for shooting out daily troubles and replacingthem by funs on the fifth floor. I’d also thank the SOM office especially Arthur deBoer and Justin Drupsteen who keep track of the administrative things of PhDs butalso help us in various other aspects of life.I have been for a while in Groningen since my bachelor study, and now it’s thetime for a new adventure to the south. I am not going to enumerate the names ofmy friends here, as a complete list is hard to make and the sequence of the names isalways a trouble. But I really appreciate the time with you. I wish that we can keepin touch in the future.Kind Regards,Xianjia2017-MAY-19Exactely 20 years ago something (good) happened in the Chinese stock market.There are many other things happening afterwards of course, most of which are bad.Chapter 3 of this thesis is co-authored with Marcel P. Timmer and Laurie S. M.Reijnders. It is part of the project “Modelling Global Value Chains: a newframework to study trade, jobs and income inequality in an interdependent world”in the Groningen Growth and Development Center (GGDC). The financial supportfrom the Dutch Science Foundation (NWO) for Reijnders and Timmer is gratefullyacknowledged (grant number 453-14-012).Contents1 Introduction 11.1 Background on global value chains . . . . . . . . . . . . . . . . . . . . 11.2 Puzzling questions and global value chains as the solution . . . . . . . 41.3 Overview of future research directions . . . . . . . . . . . . . . . . . . 62 Estimating and explaining bilateral factor exports 92.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.2 Measuring bilateral trade in factor content . . . . . . . . . . . . . . . . 142.2.1 Derivation of the new measure . . . . . . . . . . . . . . . . . . 142.2.2 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182.3 The comparison with the conventional measure of bilateral factor exports 202.4 Testing the role of factor endowments in the direction of net bilateralfactor trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252.4.1 A simple testing framework . . . . . . . . . . . . . . . . . . . . 252.4.2 The fitness of the bilateral HOV sign test . . . . . . . . . . . . 292.4.3 Alternative specifications . . . . . . . . . . . . . . . . . . . . . 322.5 Gravity equation and the home bias in factor trade . . . . . . . . . . . 352.6 Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473 Offshoring, biased technical change and labor demand: new evidencefrom global value chains 533.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533.2 Data construction and sources . . . . . . . . . . . . . . . . . . . . . . . 563.3 The changing characteristics of global valuec chain production . . . . . 593.3.1 The share of foreign value added in GVCs . . . . . . . . . . . . 593.3.2 GVC task prices . . . . . . . . . . . . . . . . . . . . . . . . . . 593.3.3 Factor cost shares in GVCs . . . . . . . . . . . . . . . . . . . . 603.4 A task-Based model of GVC production . . . . . . . . . . . . . . . . . 613.5 Estimating substitution and biased technical change in GVCs . . . . . 633.5.1 Econometric setup . . . . . . . . . . . . . . . . . . . . . . . . . 643.5.2 Baseline results . . . . . . . . . . . . . . . . . . . . . . . . . . . 65iii CONTENTS3.5.3 Robustness analysis . . . . . . . . . . . . . . . . . . . . . . . . 673.5.4 The role of information and communication technology . . . . 703.6 The impact of offshoring and BTC on domestic labor use in GVCproduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733.7 Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784 Task space: the shift of comparative advantage in globalized pro-duction 854.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 854.2 Co-occurance in RCA as a measure for task relatedness . . . . . . . . 894.3 Deriving the value-added export by tasks . . . . . . . . . . . . . . . . 924.4 The structure of the relatedness between tasks . . . . . . . . . . . . . 984.5 Paths of structural change in the task space . . . . . . . . . . . . . . . 1024.5.1 The economic potential of tasks . . . . . . . . . . . . . . . . . . 1024.5.2 Possible upgrading paths in a network graph . . . . . . . . . . 1044.6 The dynamics of economic structure in the task space . . . . . . . . . 1064.6.1 Actual structural upgrading paths in the task space . . . . . . 1074.6.2 Testing the role of task relatedness in the actual directions ofstructural change . . . . . . . . . . . . . . . . . . . . . . . . . . 1114.7 Concluding remarks and the implications on development strategies . 117Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121References 127Samenvatting (Summary in Dutch) 135

A global value chain perspective on trade, employment, and growth

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A global value chain perspective on trade, employment, and growth

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