Revisiting the quality of exports

Abstract

In the context of world value chains, the manner in which production occurs has made more difficult to judge countries’ export quality, given that the international division of labor is arranged around phases of the production process, some of which are sophisticated and others uncomplicated. When a country specializes in complex processes, it adds more value to output than countries specializing in basic transformation. For this reason, we examine two indicators of export quality based on a decomposition of the value of exports. The first indicator involves breaking down value added (VA) embodied in exports by country of origin (domestic or foreign VA), and the second distinguishes between the use that exporting countries make of products that they import: either to produce their own exports or for other uses. Our empirical information from 2009 refers to 22 economies whose indicators are examined both for total exports and for the types of goods exported.