Global Value Chains and Trade Elasticities

12 Pages Posted: 3 Jun 2014

See all articles by Byron Gangnes

Byron Gangnes

University of Hawaii - Department of Economics

Alyson C. Ma

University of San Diego School of Business

Ari Van Assche

HEC Montreal; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Date Written: June 2, 2014

Abstract

Previous studies have argued that global value chains (GVCs) have increased the sensitivity of trade to foreign income shocks. This may occur either because GVC trade is concentrated in durable goods industries, which are known to have high income elasticities (a composition effect), or because, within industries, GVC trade has a higher income elasticity than regular trade (a supply chain effect). Using Chinese trade data across customs regimes and industries during the period 1995-2009, we find evidence for the former, but not the latter.

Keywords: global value chains, trade elasticities, supply chain effect, composition effect

Suggested Citation

Gangnes, Byron and Ma, Alyson C. and Van Assche, Ari, Global Value Chains and Trade Elasticities (June 2, 2014). CIRANO - Scientific Publications 2014s-31, Available at SSRN: https://ssrn.com/abstract=2445006 or http://dx.doi.org/10.2139/ssrn.2445006

Byron Gangnes

University of Hawaii - Department of Economics ( email )

Honolulu, HI 96822
United States

Alyson C. Ma

University of San Diego School of Business ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

Ari Van Assche (Contact Author)

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada

Center for Interuniversity Research and Analysis on Organization (CIRANO) ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

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