Koen De Backer

International Comparative Evidence on Global Value Chains

The past decades have witnessed a rapid globalisation of economic activity which has significantly changed the outlook of the world economy. International production, trade and investments are increasingly organised within so-called global value chains (GVCs) where the different stages in the production process are located across different economies. Until now, GVCs have been largely discussed from a conceptual and theoretical view, but empirical work on international fragmentation has stayed a bit behind.The review of the available data and indicators on GVCs in this paper shows the increasing importance of GVCs in todays global economy, but at the same time clearly highlights some major shortcomings. While the empirical evidence based on trade data is less convincing, Input-Output data clearly reveal the growing spread of international production networks. Indicators on imported intermediates, offshoring and vertical specialisation all illustrate the growing fragmentation of production across more economies. Trade data seem to show the increasing importance of GVCs only in an indirect way but the existing trade data are not detailed enough and are not collected on the right level of analysis to analyse the international fragmentation and GVCs.Policy makers show an increasing interest in GVCs because of the pervasive effects GVCs have on national economies and are especially looking for more and better policy evidence. Important policy issues like the impact of GVCs on the competitiveness of countries and attractiveness for international investments can only be addressed by new and better metrics. The OECD is developing new empirical evidence studying the emergence of GVCs based on international trade data and Input-Output data. In addition, the OECD is currently cooperating with other international agencies and academic experts to develop new metrics for GVCs, for example data on trade in value added. Donnees factuelles internationales comparables sur les chaines de valeur mondiales Depuis quelques decennies, l’activite economique planetaire connait une mondialisation rapide, qui transforme profondement le paysage de l’economie mondiale. La production, les echanges et l’investissement internationaux s’organisent de plus en plus en chaines de valeur mondiales (CVM) dans lesquelles les differents segments des processus de production sont repartis sur plusieurs territoires. Jusqu’a present, les CVM ont principalement ete etudiees d’un point de vue conceptuel et theorique, les travaux empiriques sur la segmentation internationale ayant ete quelque peu delaisses. L’examen des donnees et indicateurs disponibles sur les CVM dans cette etude met en evidence l’importance accrue des CVM dans l’economie mondiale, tout en faisant clairement apparaitre d’importants manques. Si les elements empiriques reposant sur les chiffres des echanges sont peu convaincants, les donnees d’entrees-sorties montrent clairement l’extension grandissante des reseaux internationaux de production. Les indicateurs sur les importations de produits intermediaires, sur les delocalisations et sur la specialisation verticale illustrent tous la segmentation croissante de la production entre un plus grand nombre d’economies. Les donnees sur les echanges semblent montrer l’importance croissante des CVM, d’une maniere indirecte, et celles dont on dispose ne sont pas suffisamment detaillees et ne sont pas collectees a un niveau d’analyse qui conviendrait pour analyser la segmentation internationale et les CVM. Les responsables politiques manifestent un interet croissant pour les CVM en raison de leurs effets profonds sur les economies nationales, et ils ont particulierement besoin de donnees plus exhaustives et de meilleure qualite. Certains enjeux importants pour les politiques, tels que l’impact des CVM sur la competitivite des pays et leur attractivite pour l’investissement international, ne peuvent etre abordes qu’a l’aide de mesures nouvelles et de meilleure qualite. L’OCDE produit de nouveaux elements empiriques pour etudier l’emergence des CVM a partir des donnees sur les echanges internationaux et les entrees-sorties. Par ailleurs, l’OCDE coopere actuellement avec d’autres instances internationales et avec des experts universitaires a la construction de nouvelles mesures pour les CVM, par exemple de donnees sur les echanges en valeur ajoutee.

The Measurement of Globalisation using International Input-Output Tables

One of the distinctive characteristics of the current globalisation process is the emergence of global value chains. Within global value chains and international production networks, not only are final goods traded internationally, but intermediate goods (parts and components) and, in recent years, services also increasingly are. This trend significantly alters the economic relations between countries and increasingly casts doubt on empirical indicators such as trade and FDI that are traditionally used to measure globalisation. Input-output tables may provide much finer detail in describing current globalisation as they offer information on the use of goods instead of the rather arbitrary classification schemes that divide goods into intermediate and other categories. Moreover, input-output tables also incorporate information on the use of services, enabling measurement of the increasing offshoring of service activities in todays business activities. Based on the OECD Input-Output Database, which includes harmonised tables for 38 countries (of which 10 emerging non-OECD economies), this paper brings together empirical evidence on the growing importance of global value chains and the increasing interdependence between countries. Input-output indicators are presented for individual countries and individual industries, aiming to demonstrate the changing characteristics of current globalisation.

A closer look at the productivity advantage of foreign affiliates

In analyzing firm productivity in Belgium, this article shows empirically that both scale and efficiency contribute positively to the typical productivity advantage of foreign affiliates. Stochastic production frontier estimation using the translog functional form indicates that foreign subsidiaries exploit economies of scale more fully and benefit from better (transferred) technological capabilities than Belgian national firms (i.e., Belgian owned firms without subsidiaries abroad). Belgian multinational enterprises (MNEs), i.e., Belgian owned firms with at least one subsidiary abroad, resemble foreign-based MNEs in possessing specific technological advantages. While the increasing globalization has facilitated the realization of scale effects across borders, this article shows that the development of technological capabilities/advantages is still a prerequisite for MNEs to compete successfully abroad.In analyzing firm productivity in Belgium, this article shows empirically that both scale and efficiency contribute positively to the typical productivity advantage of foreign affiliates. Stochastic production frontier estimation using the translog functional form indicates that foreign subsidiaries exploit economies of scale more fully and benefit from better (transferred) technological capabilities than Belgian national firms (i.e., Belgian owned firms without subsidiaries abroad). Belgian multinational enterprises (MNEs), i.e., Belgian owned firms with at least one subsidiary abroad, resemble foreign‐based MNEs in possessing specific technological advantages. While the increasing globalization has facilitated the realization of scale effects across borders, this article shows that the development of technological capabilities/advantages is still a prerequisite for MNEs to compete successfully abroad.

Open Innovation in a Global Perspective

Open innovation has received a lot of attention in the business management literature and recently also in policy discussions. Until now, most of the empirical evidence has been based on case study work offering detailed insights into some best practices of open innovation in companies’ innovation strategies. While existing large-scale data may offer interesting empirical evidence on open innovation, they have surprisingly not really been analysed in great detail. Especially the increasing importance of open innovation on a global scale in so-called global innovation networks, calls for internationally comparable data on open innovation. This paper presents different indicators using existing data on R&D investments, innovation survey data, patent data and data on licensing, illustrating the increasing importance and the different characteristics of open innovation across companies, industries and countries.