Monetary and Economic Studies Vol.34 / November 2016

Upstreamness in the Global Value Chain:
Manufacturing and Services

Kenji Suganuma

This paper investigates "upstreamness," which measures the distance from the final use in terms of the number of production stages, using the World Input-Output Database's global input-output tables, which cover 40 major countries. We find that global upstreamness increased in the mid-2000s. This trend is mainly due to developments in the manufacturing sector, but the service sector also contributed to the increase. In manufacturing, upstreamness increased mainly in East Asian economies including Japan, which is consistent with the recent deepening of global value chains in this area. In services, the growing role of business services contributed to the deepening of value chains, such as outsourcing via leasing and staff agencies, and linkages to new businesses through mobile telecommunications. In further research, the concept of upstreamness can be applied to the analysis of industries' international competitiveness and of the influence of demand shocks across countries.

Keywords: Upstreamness; Global value chain; Production fragmentation; I–O tables

Views expressed in the paper are those of the authors and do not necessarily reflect those of the Bank of Japan or Institute for Monetary and Economic Studies.

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