Measuring Productivity Growth and Technology Spillovers Through Global Value Chains: Analysis of a US–Sino Decoupling
Essays in Honor of M. Hashem Pesaran: Prediction and Macro Modeling
ISBN: 978-1-80262-062-7, eISBN: 978-1-80262-061-0
Publication date: 18 January 2022
Abstract
This chapter estimates heterogeneous productivity growth and spatial spillovers through industrial linkages in the United States and China from 1981 to 2010. The authors employ a spatial Durbin stochastic frontier model and estimates with a spatial weight matrix based on inter-country input–output linkages to describe the spatial interdependencies in technology. The authors estimate productivity growth and spillovers at the industry level using the World KLEMS database. The spillovers of factor inputs and productivity growth are decomposed into domestic and international effects. Most of the spillover effects are found to be significant and the spillovers of productivity growth offered and received provide detailed information reflecting interdependence of the industries in the global value chain (GVC). The authors use this model to evaluate the impact of a US–Sino decoupling of trade links based on simulations of four scenarios of the reductions in bilateral intermediate trade. Their estimation results and their simulations are as mentioned based on date that ends in 2010, as this is the only KLEMS data available for these countries at this level of industrial disaggregation. As the GVC linkages between the United States and China have expanded since the end of their sample period their results can be viewed as informative in their own right for this period as well as possible lower bounds on the extent of the spillovers generated by an expanding GVC.
Keywords
Acknowledgements
Acknowledgments
We would like to thank Harry X. Wu for making available to us the China KLEMS data, Jaepil Han for providing the code for the spatial-CSS estimations. We would also like to thank Co-Editor Alexander Chudik and two anonymous referees for comments that significantly improved the paper. The usual caveat applies.
Citation
Liu, W., Sickles, R.C. and Zhao, Y. (2022), "Measuring Productivity Growth and Technology Spillovers Through Global Value Chains: Analysis of a US–Sino Decoupling", Chudik, A., Hsiao, C. and Timmermann, A. (Ed.) Essays in Honor of M. Hashem Pesaran: Prediction and Macro Modeling (Advances in Econometrics, Vol. 43A), Emerald Publishing Limited, Leeds, pp. 243-267. https://doi.org/10.1108/S0731-90532021000043A012
Publisher
:Emerald Publishing Limited
Copyright © 2022 Weilin Liu, Robin C. Sickles and Yao Zhao