The Effect of Product Classifications on the Formulation of Export Unit Value Indices: A Comparison of Export Unit Value Indices based on SITC and HS

With the globalization of economic activity, the relative weight of foreign trade in national economic activities has increased, and the question of how to measure trends in the value and quantity of international trade has become an important issue for policy-makers and economists. This paper compares the chain-linked indices formulated by Masato Kuroko, based on HS this fiscal year for individual industry categories and countries with chain-linked indices based on SITC-R1 codes, in order to study how changes in the quality composition of the same products, which cannot be considered using unit value indices based on SITC-R1 codes, can be considered using unit value indices based on the more detailed HS product classifications.

Revisiting the determinants of unit values

This paper studies the issue of how traded quantities affect trade prices, which has been relatively unexplored in the trade literature. By reproducing previous literatures' regressions which are based on the general equilibrium trade theories, incorporating the role of traded quantities, this paper shows a possibility of prevalence of the second degree price discrimination (quantity discount) in international trade, rather than the pricing behaviour of the general equilibrium theories.

Product quality and intra-industry trade

In this study, we argue that the conventional intra-industry trade (IIT) index does not address the quality issue directly and propose a methodology to make full use of unit-price gap information to deduce quality differences between simultaneously exported and imported products. By applying this measure to German trade data at the eight-digit level, we study the quality improvement of Chinese export goods in its IIT with Germany. We compare the case of China with those of Eastern European countries, which are also major trading partners of Germany. Our results show that the unit-value difference in IIT between Germany and Eastern European countries is clearly narrowing. However, China's export prices to Germany are much lower than Germany's export prices to China, and this gap has not narrowed over the last 23 years. This is at odds with the common perception that China's product quality has improved, as documented by Rodrik (2006) and Schott (2008). Our results support Xu (2010), which argued that incorporating the quality aspect of the exported goods weakens or even eliminates the evidence of the sophistication of Chinese export goods in Rodrik (2006).

Tracing CO2 emissions in global value chains

This paper integrates two lines of research into a unified conceptual framework: trade in global value chains and embodied emissions. This allows both value added and emissions to be systematically traced at the country, sector, and bilateral levels through various production network routes. By combining value-added and emissions accounting in a consistent way, the potential environmental cost (amount of emissions per unit of value added) along global value chains can be estimated. Using this unified accounting method, we trace CO2 emissions in the global production and trade network among 41 economies in 35 sectors from 1995 to 2009, basing our calculations on the World Input–Output Database, and show how they help us to better understand the impact of cross-country production sharing on the environment.