AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Aggregation Bias in the Measurement of US Global Value Chains
AEA Papers and Proceedings
vol. 114,
May 2024
(pp. 136–42)
Abstract
This paper employs US census microdata to construct establishment-level measures of global value chains (GVCs) and then assesses aggregation bias—the bias occurring when an entire industry is essentially treated as a single establishment. Our establishment-level measures indicate little slowdown in GVC expansion between 2002 and 2012. Related, the aggregation bias is negative, and it increased during this period. A decomposition reveals that most of the increase is from within establishments with high export and import intensities. Our results suggest that granular GVC measures will provide further understanding about how firms and economies adjust to shocks.Citation
Flaaen, Aaron, Fariha Kamal, Eunhee Lee, and Kei-Mu Yi. 2024. "Aggregation Bias in the Measurement of US Global Value Chains." AEA Papers and Proceedings, 114: 136–42. DOI: 10.1257/pandp.20241022Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- F14 Empirical Studies of Trade
- F23 Multinational Firms; International Business
- L14 Transactional Relationships; Contracts and Reputation; Networks