Mapping Vertical Trade

Publication | June 2011

The paper develops a method to map global networks of production sharing and processing trade. Relying on highly detailed bilateral trade data across a matrix of 75 countries, a network index gauges countries' interdependence according to the extent of trade in parts and components for further processing and assembly of final export goods. The set of bilateral network relations is then subjected to an algorithm that lays it out for visualization as a world map of vertical trade networks. Maps are drawn in relation to processing trade across all industries, as well as for the electric/electronics and automotive industries, where such trade is most prominent. The analysis identifies three major hubs in the global networks: the People's Republic of China in connection with Japan, Germany, and the United States. Apart from Mexico (mainly because of itsmaquiladorasnetwork ties to the United States) the analysis highlights that outside Asia, developing countries are not yet involved in global production networks to any significant degree.

Contents 

  • Abstract
  • Introduction
  • The Data
  • The Network Trade Index
  • Mapping Vertical Trade Networks
  • Value-Chain Dependence on Japan
  • Conclusions
  • Appendix
  • References