Microfoundation of ICIO Tables through Firm-Level Data: Enhancing GVC Participation and Positioning Indicators

This paper provides a methodological contribution to reconciling and integrating the Inter-Country Input-Output accounting framework, commonly used for country-industry Global Value Chain (GVC) analysis, with firm-level data. The goal is to establish robust micro-founded indicators of GVC participation and positioning. Firm-level data on production, and exported and imported (narrowly defined) products are used to more precisely measure bilateral trade flows by intermediate or final use within the Global Trade Analysis Project (GTAP). This integration enhances the accuracy of estimating the sourcing and allocation of imported inputs across sectors, thereby improving the quality of data for calculating trade in value-added indicators. The resulting integrated database is used to compute improved GVC-related indicators, providing insights into the participation and positioning of Italian firms.