Estimating Extended Supply-Use Tables in Basic Prices with Firm Heterogeneity for the United States: A Proof of Concept

This paper presents proof-of-concept trade-in-value added (TiVA) statistics estimated from extended supply-use tables for the United States that account for firm heterogeneity. The tables used to estimate the TiVA statistics extend recently-introduced supply-use tables for the United States by disaggregating the components of supply and use by multinational and other firms. Recent research has shown both the advantages of measuring trade on a value added basis when analyzing bilateral trade flows and the dominance of multinational enterprises in U.S. trade in goods and services. Our TiVA statistics for the United States include measures based on traditional supply-use presentations as well as statistics that reflect firm-level heterogeneity for the year 2011. The comparative analysis of the two sets of statistics allows us to understand better how firms within industries engage in global value chains and if the incorporation of firm heterogeneity provides a more accurate measurement of TiVA. We find that domestic value added as a share of the value of exports is similar within large industry groups. However, there is much more variation in the value added share of exports when firm type is accounted for. Also, the additional granularity shows the share of this value added that comes directly from the producing industry varies much more across industries.