Global value networks

We study, at the industry level, the patterns of correlation between value added trade flows and the presence of multinational business groups (MBGs) across countries and industries. Value added trade flows are computed from WIOD data through the methodology developed by Wang et al. (2013). Data on the presence of MBGs are obtained as in Altomonte and Rungi (2013), using data from ORBIS and the Ownership Database by Bureau van Dijk. We run gravity estimations augmented with measures of MBGs presence across “triplets”, defined as “home country - home industry - partner country”. We employ as dependent variables both gross exports and the four main value added components of exports (e.g. domestic and foreign value added). We find evidence of a rich pattern of positive correlations between value added trade and the presence of MBGs.