The Domestic Segment of Global Supply Chains in China under State Capitalism

This paper proposes methods to incorporate firm heterogeneity in the standard input-output table-based approach to portray the domestic segment of global value chains in a country. The analysis uses Chinese firm census data for the manufacturing an...

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Bibliographic Details
Main Authors: Tang, Heiwai, Wang, Fei, Wang, Zhi
Language:English
en_US
Published: World Bank, Washington, DC 2014
Subjects:
GDP
SME
Online Access:http://documents.worldbank.org/curated/en/2014/06/19749954/domestic-segment-global-supply-chains-china-under-state-capitalism
http://hdl.handle.net/10986/19366
Description
Summary:This paper proposes methods to incorporate firm heterogeneity in the standard input-output table-based approach to portray the domestic segment of global value chains in a country. The analysis uses Chinese firm census data for the manufacturing and service sectors, along with constrained optimization techniques. The conventional input-output table is split into sub-accounts, which are used to estimate direct and indirect domestic value added in exports of different types of firms. The analysis finds that in China, state-owned enterprises and small and medium domestic private enterprises have much higher shares of indirect exports and ratios of value-added exports to gross exports compared with foreign-invested and large domestic private firms. Based on input-output tables for 2007 and 2010, the paper finds increasing value-added export ratios for all firm types, particularly for state-owned enterprises. It also finds that state-owned enterprises are consistently more upstream while small and medium domestic private enterprises are consistently more downstream within industries. These findings suggest that state-owned enterprises still play an important role in shaping China's exports.