Made in the World?

41 Pages Posted: 10 Sep 2015

See all articles by S. Miroudot

S. Miroudot

Organization for Economic Co-Operation and Development (OECD) - Trade Directorate (ECH)

Hakan Nordstrom

Swedish Board of Trade

Date Written: September 2015

Abstract

In the past five years, the concept of “global value chain” (GVC) has become popular to describe the way firms fragment production into different stages located in different economies. The “made in the world” narrative suggests that production today is global with inputs coming from all parts of the world before being assembled into final products also shipped all over the world. The empirical basis of this story has however been questioned, suggesting that supply chains are regional rather than global. In this paper we offer a comprehensive review of the evidence based on the World Input-Output Database (WIOD), including new indicators counting the number of domestic and foreign production stages, border crossings and geographic length of the supply chains. The study covers 1995 to 2011. All evidence points in the same direction. The made in the world narrative is correct as far as the direction is concerned, but we still have a long way to go. On average, globalization proceeds at 40 kilometres a year.

Keywords: Fragmentation of production, vertical specialization, global value chain

JEL Classification: F14, L16, L23

Suggested Citation

Miroudot, Sebastien and Nordstrom, Hakan, Made in the World? (September 2015). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2015/60, Available at SSRN: https://ssrn.com/abstract=2658562 or http://dx.doi.org/10.2139/ssrn.2658562

Sebastien Miroudot (Contact Author)

Organization for Economic Co-Operation and Development (OECD) - Trade Directorate (ECH) ( email )

2, rue André-Pascal
Paris Cedex 16, 75775
France

Hakan Nordstrom

Swedish Board of Trade ( email )

Sweden

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