Measuring Value in Global Value Chains

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This paper compares alternative ways of measuring participation of a country in Global Value Chains (GVCs) and estimates distribution of gains between countries in terms of countries' shares in total value-added created by trade under GVCs. It further shows that conclusions and implications of linking into GVCs can change drastically, especially for developing countries, with alternative ways of measuring participation in GVCs. Gains from linking in GVCs in terms of net value-added exports are estimated for different countries. Sector-wise analysis is undertaken to assess the importance of GVCs to developing countries. Examining the structure of exports in different countries and gains from participation in GVCs, the paper argues that it may not help to trade more without compensating gains linked to production activities and creation of domestic value added. It is therefore important to ‘gainfully link into GVCs' in identified industries where the country is able to derive net positive domestic value-added gains. 

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