GTAP and TiVA. Differences between the two databases and their implications for trade in value-added indicators

Fragmentation of global production requires measurement of trade in value added, which accounts for the way slices of value embedded in goods or services are added at each step of increasingly international manufacturing processes within global supply chains. The quality of indicators measuring trade in value added finally depends on the quality of the underlying global Inter-Country Input-Output table which, in turn, depends on the quality and availability of underlying national statistics and the balancing and estimation techniques used in the harmonization procedure. Although the use of statistics based on this accounting has become more routine in economic research, there is neither harmonization among different global databases nor a standard in the construction of data on which trade in value added is estimated. This work is an attempt to systematize the potential sources of the differences between global databases and to show the deviation in the estimates of global value chains related trade.