The Rise of Global Manufacturing Value Chains: A New Perspective Based on the World Input-Output Database

The aim of this chapter is to outline a new method and database that have been recently used to analyze the deep changes in international production. It is based on the World Input–Output Database (WIOD) which provides a global input–output table describing flows of goods and services within, as well as across, countries. In addition, it contains data on the factor content of production at the industry level for forty countries. As such the WIOD can be seen as the international equivalent of the national KLEMS databases described elsewhere in this volume. In this chapter we will summarize the main findings of our work analyzing the value that is added in various stages of regionally dispersed production processes.Footnote1 A central concept in this line of work is the income generated in a country by participating in global manufacturing production, abbreviated by the term “GVC income” (for global value chain income). It indicates to what extent a country can compete with other nations in terms of activities related to global manufacturing. These activities take place in manufacturing industries, but also in services industries. We take this concept as a starting point to answer three main questions: how far has international fragmentation progressed? Which countries have increased their competitiveness in global production networks? And is there a change in the factor income distribution within global networks?