OECD TRADE INDICATORS OECD TRADE INDICATORS PROJECTPROJECT

Statistical analysis of international Statistical analysis of international trade and production: trade and production: towards a scoreboard of indicatorstowards a scoreboard of indicators

Lelio Iapadre (University of L’Aquila and Lelio Iapadre (University of L’Aquila and National Institute for Foreign Trade, Italy)National Institute for Foreign Trade, Italy)Alessia Proietti (National Institute for Foreign Trade, Italy)Alessia Proietti (National Institute for Foreign Trade, Italy)

BackgroundBackground

The OECD Handbook on Economic Globalisation Indicators The OECD Handbook on Economic Globalisation Indicators (HEGI)(HEGI)– The concept of economic globalisation and its measurementThe concept of economic globalisation and its measurement– Foreign direct investmentForeign direct investment– The economic activity of multinational enterprisesThe economic activity of multinational enterprises– The internationalisation of technologyThe internationalisation of technology– Aspects of trade globalisationAspects of trade globalisation

The Trade Indicators Project (TIP): a survey of statistical The Trade Indicators Project (TIP): a survey of statistical indicators on international trade and productionindicators on international trade and production– International integrationInternational integration– Policy restrictivenessPolicy restrictiveness– Performance and competitivenessPerformance and competitiveness– Structural indicatorsStructural indicators– Structural decomposition techniquesStructural decomposition techniques

Enterprise-related dataEnterprise-related data– OECD Statistics on Enterprises by Size Class (SEC)OECD Statistics on Enterprises by Size Class (SEC)– Eurostat pilot project on enterprise-related trade dataEurostat pilot project on enterprise-related trade data

TargetsTargets

Identifying a limited set of statistical Identifying a limited set of statistical indicators, based on their analytical and indicators, based on their analytical and policy relevancepolicy relevance

Developing enterprise-related indicators, Developing enterprise-related indicators, based on linkages between the existing based on linkages between the existing statistical registers and databases on statistical registers and databases on business international activitiesbusiness international activities

Publishing a new statistical product on Publishing a new statistical product on international trade and productioninternational trade and production

TIP products in 2003TIP products in 2003

A taxonomy of statistical A taxonomy of statistical indicators for the analysis of indicators for the analysis of international trade and international trade and productionproduction

A review of trade policy indicatorsA review of trade policy indicators New indicators for the analysis of New indicators for the analysis of

intra-regional tradeintra-regional trade

The Scoreboard on The Scoreboard on Economic GlobalisationEconomic Globalisation A final target and a framework for A final target and a framework for

on-going projectson-going projects Co-ordination between different Co-ordination between different

projects (HEGI, TIP, SEC) and projects (HEGI, TIP, SEC) and OECD departmentsOECD departments

Co-operation with other Co-operation with other institutions and research centresinstitutions and research centres

Some examples:Some examples:international performance international performance and competitiveness and competitiveness indicatorsindicators The taxonomy:The taxonomy:

– Net trade indicatorsNet trade indicators– Market sharesMarket shares– Price indicatorsPrice indicators– Composite indicatorsComposite indicators

Net trade performance Net trade performance indicatorsindicators The normalized trade balanceThe normalized trade balance

Z = (X – M) / (X + M)Z = (X – M) / (X + M)

– – 1 1 Z Z 1 1

where: where: X = exportsX = exports

M = importsM = imports

Normalised trade balance, 2003

Austria

France

Korea

Switzerland

Italy

United Kingdom

United States

Turkey

Portugal

Spain

Luxembourg

Poland

Australia

Iceland

New Zealand

Hungary

OECD

Czech Republic

Mexico

Slovak Republic

Belgium

Canada

Netherlands

Denmark

Japan

Germany

Finland

Norway

Ireland

Sweden

-35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30

Source: OECD-Main Economic Indicators, March 2004

Market sharesMarket shares

The share of OECD exportsThe share of OECD exports

SSii = X = Xii / Σ / Σii X Xii

0 0 S Sii 1 1

where: where: XXii = exports of country = exports of country ii

i = 1 … n OECD i = 1 … n OECD membersmembers

Shares of OECD exports

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0

Germ

any

United

Sta

tes

Japa

n

Franc

e

United

King

dom

Italy

Canad

a

Nethe

rland

s

Belgium

Korea

Mex

ico

Spain

Sweden

Switzer

land

1999 2001 2003

Shares of OECD exports

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1,8

2,0

Irelan

d

Austri

a

Austra

lia

Norway

Denm

ark

Polan

d

Finlan

d

Czech

Rep

ublic

Turke

y

Hunga

ry

Portu

gal

Slova

k Rep

ublic

New Z

ealan

d

Greec

e

Luxe

mbo

urg

Icelan

d

1999 2001 2003

Source: OECD-Main Economic Indicators, March2004

Competitiveness Competitiveness indicatorsindicators The real effective exchange rateThe real effective exchange rate

q = E q = E P / P* P / P*

where:where:

E = nominal effective exchange rate E = nominal effective exchange rate

(foreign currency per unit of domestic (foreign currency per unit of domestic

currency)currency)

P = index of domestic pricesP = index of domestic prices

P* = index of foreign pricesP* = index of foreign prices

Real effective exchange rates(based on consumer prices, 1995=100)

1998 1999 2000 2001 2002 2003

70

80

90

100

110

120

130

140

Canada France Germany

Italy Japan United Kingdom

United States

Source: OECD, Main Economic Indicators

Some examples: Some examples: structural indicatorsstructural indicators The taxonomyThe taxonomy

– Single-flow indicators of trade intensity Single-flow indicators of trade intensity and specializationand specialization

– Net-trade indicators of specializationNet-trade indicators of specialization– Inter/Intra-industry trade intensityInter/Intra-industry trade intensity– Intra-firm trade indicatorsIntra-firm trade indicators– Measures of similarityMeasures of similarity– Measures of concentration and Measures of concentration and

diversificationdiversification

Single-flow indicators of Single-flow indicators of trade intensity and trade intensity and specializationspecialization The symmetric revealed The symmetric revealed

comparative advantage indexcomparative advantage index

SRCASRCAikik = (RCA = (RCAikik – 1) / (RCA – 1) / (RCAikik + 1) + 1)

RCARCAikik = (x = (xikik / Σ / Σkk x xikik) / (x) / (xwkwk / Σ / Σkk x xwkwk))

where:where:

xxikik = country = country ii’s exports of product ’s exports of product kk

xxwkwk = world exports of product = world exports of product kk

SYMMETRIC REVEALED COMPARATIVE ADVANTAGE INDICES: FURNITURE 2003

-80,0 -60,0 -40,0 -20,0 0,0 20,0 40,0 60,0 80,0

Poland

Italy

Turkey

Mexico

Slovak Republic

Portugal

Denmark

Spain

Canada

Austria

Sweden

Finland

Belgium

OECD

Germany

France

Greece

Netherlands

Korea

New Zealand

United Kingdom

United States

Switzerland

Luxembourg

Norway

Ireland

Australia

Japan

Net trade indicators of Net trade indicators of specializationspecialization The normalized share balanceThe normalized share balance

NSBNSBikik = [(x = [(xikik / Σ / Σkk x xikik) - (m) - (mikik / Σ / Σkk m mikik)] / )] /

[(x[(xikik / Σ / Σkk x xikik) + (m) + (mikik / Σ / Σkk m mikik)] )]

- 1 - 1 NSB NSBikik 1 1

where:where:

xxikik = country = country ii’s exports of product ’s exports of product kk

mmikik = country = country ii’s imports of product ’s imports of product kk

NORMALISED SHARE BALANCES: FURNITURE 2003

-100,0 -80,0 -60,0 -40,0 -20,0 0,0 20,0 40,0 60,0 80,0 100,0

Poland

Italy

Turkey

Mexico

Slovak Republic

Portugal

Denmark

Spain

Canada

Austria

Sweden

Finland

Belgium

OECD

Greece

Germany

France

Netherlands

Korea

United States

New Zealand

United Kingdom

Luxembourg

Switzerland

Australia

Norway

Japan

Ireland

The Grubel-Lloyd index of The Grubel-Lloyd index of intra-industry tradeintra-industry trade

Definition of intra-industry trade: Definition of intra-industry trade: balanced balanced two-way trade in goods two-way trade in goods produced by the same industryproduced by the same industry– Inspiration: studies on trade bilateralism Inspiration: studies on trade bilateralism

in the Thirtiesin the Thirties– Relation with measures of similarityRelation with measures of similarity

mx

mx1GL

ijkijk

ijkijkijk

mx

mxmxGL n

1kijkijk

n

1k

n

1kijkijkijkijk

ij

The Vona index of The Vona index of intra-industry tradeintra-industry trade

Definition of intra-industry trade:Definition of intra-industry trade: two-way flows of goods two-way flows of goods produced by the same produced by the same industry, industry, independently of independently of their balancetheir balance

The CEPII approach: the overlap The CEPII approach: the overlap thresholdthreshold

n

1kijkijk

m

1kijkijk

ij

mx

mxV

Vona Grubel and Lloyd Vona Grubel and Lloyd

Australia 71,9 0,9 63,7 2,0

Austria 100,0 55,2 100,0 47,9

Belgium 99,8 9,5 99,9 34,8

Canada 85,9 1,7 84,0 16,1

Czech Republic 94,6 32,3 100,0 40,3

Denmark 99,7 17,4 100,0 24,2

Finland 86,7 8,8 97,2 23,5

France 100,0 14,1 99,8 46,5

Germany 100,0 23,2 - -

Greece 82,2 0,7 79,6 19,4

Hungary 92,9 28,0 99,9 42,0

Iceland 12,8 0,1 17,1 0,8

Ireland 28,9 0,8 82,2 12,1

Italy - - 100,0 30,1

Japan 75,3 2,0 82,2 12,8

Korea 64,9 3,1 45,6 10,5

Luxembourg 57,7 5,4 90,1 3,4

Mexico 55,3 3,5 90,2 61,0

Netherlands 98,8 7,1 100,0 32,4

New Zealand 17,1 1,0 35,5 7,9

Norway 76,9 4,3 97,9 26,7

Poland 97,5 28,3 100,0 18,3

Portugal 80,3 13,4 87,3 41,1

Slovak Republic 89,0 29,0 99,9 27,9

Spain 99,7 30,2 98,5 61,0

Sweden 99,4 12,7 97,8 36,8

Switzerland 99,9 25,6 99,9 45,4

Turkey 87,3 13,1 99,5 23,8

United Kingdom 100,0 5,9 99,8 31,2

United States 99,6 4,3 99,9 31,7* 92 elementary items (NC8)

Indices of Intra Industry Trade, HS: 94*, Furniture, 2002(percentage values)

ITALY GERMANY

Measures of similarityMeasures of similarity

The Finger-Kreinin index of The Finger-Kreinin index of similarity between trade similarity between trade distributionsdistributions

FKFKijij = 1 – [½ Σ = 1 – [½ Σkk |(x |(xikik / Σ / Σkk x xikik) - (x) - (xjkjk / Σ / Σkk x xjkjk)|])|]

where:where:

xxikik = country = country ii’s exports of product ’s exports of product kk

xxjkjk = country = country jj’s exports of product ’s exports of product kk

AUS AUT BEL CAN DAN FIN FRA GER GRE IRE ITA JPN KOR LUX MEX NLD NZL NOR POL POR SLO SPA SWE CHE TUR UK USA

Australia 100,0 Austria 36,5 100,0 Belgium 43,4 63,2 100,0 Canada 56,2 59,1 60,3 100,0 Denmark 48,3 64,1 58,8 53,8 100,0 Finland 31,8 64,7 48,0 50,1 53,5 100,0 France 40,5 71,3 70,6 59,8 63,4 54,2 100,0 Germany 37,4 76,9 65,6 66,4 65,4 54,3 76,5 100,0 Greece 41,7 48,9 52,9 45,1 55,2 38,2 50,4 45,5 100,0 Ireland 28,2 46,8 46,9 31,4 55,0 36,0 49,5 54,3 31,0 100,0 Italy 39,6 76,1 62,6 53,1 64,4 48,8 68,7 73,5 51,7 48,2 100,0 Japan 23,3 64,2 51,6 49,4 46,2 60,4 60,6 73,3 29,8 47,1 57,9 100,0 Korea 28,6 68,6 56,9 46,6 50,3 64,0 61,0 64,8 37,7 38,9 60,5 75,3 100,0 Luxembourg 29,7 65,7 47,9 40,9 51,2 52,4 52,9 60,8 39,8 42,8 59,6 56,4 55,6 100,0 Mexico 37,1 67,0 55,1 60,1 59,2 59,9 60,8 66,8 41,1 40,2 60,9 72,3 72,7 49,6 100,0 Netherlands 45,9 69,3 66,5 54,6 72,3 54,6 67,9 70,7 55,8 55,1 65,4 57,3 59,6 58,4 64,1 100,0 New Zealand 43,9 36,1 34,5 39,1 45,7 33,7 35,3 30,5 39,8 24,9 35,7 22,5 26,5 28,8 28,6 39,1 100,0 Norway 48,1 25,3 27,3 44,7 35,6 27,2 26,4 27,2 33,4 20,0 26,2 19,4 22,9 21,5 29,3 32,3 28,2 100,0 Poland 35,4 74,5 61,4 58,6 63,1 60,8 66,7 63,8 49,9 37,1 67,8 53,1 62,3 56,5 61,9 63,6 37,5 26,8 100,0 Portugal 33,8 66,9 58,7 59,3 54,6 50,5 64,0 64,5 49,7 32,4 65,7 53,6 54,8 49,0 63,7 54,3 34,3 24,3 66,3 100,0 Slovak Republic 31,1 66,2 61,0 64,1 55,4 52,7 61,5 66,0 42,8 30,7 60,5 60,5 55,8 53,9 62,0 53,8 29,0 25,9 70,7 66,7 100,0 Spain 38,9 65,8 69,5 66,4 57,3 48,5 72,0 73,2 55,9 36,4 69,3 61,1 55,8 47,1 59,8 62,8 39,7 27,9 65,8 69,9 72,6 100,0 Sweden 34,5 81,0 64,9 63,0 64,5 69,7 70,7 76,0 43,7 48,8 65,9 65,8 66,0 60,3 67,3 64,9 33,4 26,4 65,9 65,2 64,2 63,5 100,0 Switzerland 29,0 55,9 59,7 37,1 54,1 41,8 55,7 59,6 40,8 68,4 55,7 49,1 46,8 46,2 43,4 59,3 26,9 20,2 44,2 39,6 39,3 45,9 56,2 100,0 Turkey 30,3 54,5 55,0 45,8 43,5 41,3 54,6 50,6 58,0 24,1 59,8 43,4 51,3 45,3 49,7 46,6 33,2 21,6 59,2 65,2 57,1 61,0 50,0 35,1 100,0 United Kingdom 44,8 73,4 68,5 58,6 68,6 54,4 75,4 78,0 50,8 56,5 70,3 63,5 64,7 56,3 67,8 75,9 31,2 31,1 62,1 57,7 55,9 62,3 73,8 64,9 48,5 100,0 United States 40,7 74,9 60,4 54,7 59,0 55,8 72,8 75,6 43,1 52,7 68,4 68,4 66,8 58,1 63,8 71,7 35,4 23,8 60,1 57,1 51,6 59,4 68,9 60,8 47,6 77,9 100,0

Finger-Kreinin index of similarity of export distributions by product, 2003

Measures of Measures of concentrationconcentration The Herfindahl index of export The Herfindahl index of export

concentration by productconcentration by product

HHii = =

where:where:

xxikik = country = country ii’s exports of product ’s exports of product kk

k k ikik xx

2

Australia 23,7 26,2 26,3 26,1 25,9Austria 27,3 27,6 27,7 27,5 27,1Belgium 23,1 23,2 23,6 24,1 24,0Canada 30,2 29,3 29,0 29,1 29,5Czech Republic 25,9 27,5 n.a. n.a. n.a.Denmark 22,3 22,7 23,0 23,0 22,9Finland 35,0 36,8 34,4 34,1 33,1France 25,2 25,4 25,6 24,8 24,5Germany 30,3 30,4 30,5 30,7 30,5Greece 20,9 22,6 20,8 20,1 19,7Hungary 36,7 37,9 n.a. n.a. n.a.Iceland 56,8 54,5 52,9 52,0 n.a.Ireland 37,1 38,5 37,8 37,1 35,1Italy 26,2 25,5 25,5 25,1 25,5Japan 39,6 40,3 39,3 39,7 39,7Korea 33,0 34,9 33,4 35,4 36,4Luxembourg 29,2 30,8 33,1 32,6 36,2Mexico 36,9 37,6 37,3 36,6 36,0Netherlands 25,0 25,9 25,7 24,6 24,4New Zealand 33,0 34,9 33,4 35,4 36,4Norway 52,6 64,6 63,8 63,6 63,2Poland n.a. n.a. n.a. 23,1 23,2Portugal 25,3 24,7 25,1 25,0 24,8Slovak Republic 27,0 28,4 27,1 27,7 33,2Spain 28,8 27,8 27,4 27,1 28,0Sweden 31,5 31,7 28,9 28,8 28,9Switzerland 28,7 28,7 29,1 29,2 29,3Turkey 22,5 22,2 21,8 23,3 23,4United Kingdom 29,0 29,0 29,2 28,3 27,1United States 30,1 30,9 29,6 28,8 28,1OECD 27,2 27,8 27,0 26,7 26,4* HS - 2 digits

2002 2003

Herfindahl index of export concentration by product*

1999 2000 2001

The need for The need for enterprise-related enterprise-related statisticsstatistics A clear understanding of A clear understanding of

phenomena such as intra-firm phenomena such as intra-firm trade and international trade and international production networks requires production networks requires enterprise-related dataenterprise-related data

Available statistical sourcesAvailable statistical sources– The AFA and FATS databasesThe AFA and FATS databases– Enterprise-related trade statisticsEnterprise-related trade statistics

Italian exports value Italian exports value by enterprise size - by enterprise size - 20012001

31,2%

30,8%

10,8%

15,9% 11,3%

1-49employees

50-99employees

100-249employees

250-499employees

more than 500employees

16 - 255%

26 - 403% more than 40

1%

11 - 155%

6 - 1010%

3 - 517%

214%

145%

12 3 - 5 6 - 10 11 - 15 16 - 25 26 - 40more than 40

Italian exporting firms Italian exporting firms by number of markets by number of markets - 2001- 2001

0

5

10

15

20

25

30

Italy 1987 Italy 1998 France 1987 France 1998 Germany 1987 Germany 1998 United Kingdom1987

United Kingdom1998

SHARES OF THE UNITED STATES MARKET

Foreign affiliates employees Merchandise imports

Source: OECD, Measuring Globalization and IMF-DOTS.

ConclusionsConclusions

Main features of the Scoreboard on Main features of the Scoreboard on Economic GlobalizationEconomic Globalization– An integrated analysis of international An integrated analysis of international

trade and productiontrade and production– Emphasis on enterprise-related dataEmphasis on enterprise-related data– A user-friendly tool, giving access to a A user-friendly tool, giving access to a

wide range of different data-baseswide range of different data-bases– A laboratory for new data production A laboratory for new data production

techniques, based on linkages between techniques, based on linkages between different archivesdifferent archives