Value added in exports in an input-output frameworkan application to the effects of the brexit referendum

Résumé

In a world of global value chains and internationally fragmented production where intermediate goods and services represent more than half of total trade, using a valueadded approach that distinguishes the contribution to exports of the different inputsourcing economies is particularly useful for evaluating the industrial implications of new protectionism and economic disintegration processes such as Brexit. This Ph.D. dissertation has a triple purpose: one, to attempt to settle the methodological debate in the economic literature for the decomposition of value added in exports and define an accurate way of expressing bilateral value-added exports (crucial to study Brexit): second, to provide the research community with an open-source user-friendly analytical software (in R programming language) to simplify the calculation of complex value-added indicators with flexible sector and geographical customization; and, third, to use the proposed indicators and a structural decomposition method to estimate the impact of the 2016 Brexit referendum on the UK’s value-added exports, identifying changes due not only to ordinary demand shifts but to extraordinary shocks in the input sourcing structure that could have deteriorated the UK’s linkage effects (i.e., the UK’s capacity to generate value added). The results can lay the foundations for further research on Brexit or other trade and industrial policy decisions that might overlook the structural impact of suboptimal international input allocations.