Koopman-Wang-Wei from Wang-Wei-Zhu Decomposition

This function by default returns a disaggregated version of the the Koopman-Wang-Wei (KWW) decomposition breaking up sector-level gross exports into 9 value added terms, from an already computed and more detailed (16 term) Wang-Wei-Zhu decomposition of sector-level gross exports. An aggregation option also allows obtaining the aggregate KWW decomposition.

Usage

wwz2kww(x, aggregate = FALSE)

Arguments

x

a data.table with the WWZ decomposition obtained from wwz. Alternatively an 'icio' class object from load_icio can be supplied, which will toggle calling wwz() first.

aggregate

logical. TRUE aggregates the KWW decomposition to the country level, giving exactly the same output as kww. FALSE maintains the sector level decomposition in KWW format.

Value

A data.table with exports decomposed into 9 components (columns), see the table above and kww for a shorter description of the 9 terms.

Details

The mapping of the 16 terms in the WWZ decomposition to the 9 terms in the KWW decomposition is provided in table E2 in the appendix of the WWZ (2013) paper. The table is reproduced here using the term naming conventions followed in this package.

WWZ Terms	KWW Term	Description
DVA_FIN	DVA_FIN	Domestic VA in final goods exports.
DVA_INT, DVA_INTrexI1	DVA_INT	Domestic VA in intermediate exports absorbed by direct importers. WWZ separates VA absorbed directly from VA that transits through third countries before returning to the direct importer.
DVA_INTrexF, DVA_INTrexI2	DVA_INTrex	Domestic VA in intermediate exports reexported to third countries and absorbed there. WWZ separates VA in final goods exports of direct importer to third countries from VA in intermediate exports to third countries.
RDV_FIN, RDV_FIN2	RDV_FIN	Domestic VA in intermediate exports that returns home via final imports. WWZ separates final imports from the direct importer and from third countries.
RDV_INT	RDV_INT	Domestic VA in intermediate exports that returns via intermediate imports (used to produce a locally consumed final good).
DDC_FIN, DDC_INT	DDC	Double counted domestic VA in gross exports. WWZ separates double counting due to final and intermediate exports production.
MVA_FIN, OVA_FIN	FVA_FIN	Foreign VA in final goods exports. WWZ separates FVA from direct importer and from third countries.
MVA_INT, OVA_INT	FVA_INT	Foreign VA in intermediate exports. WWZ separates FVA from direct importer and from third countries.
MDC, ODC	FDC	Double counted foreign VA in gross exports. WWZ separates FDC from direct importer and from third countries.

Note

If both WWZ and KWW decompositions are required, it is computationally more efficient to call wwz2kww(x, aggregate = TRUE) on an already computed WWZ decomposition, than to call kww on an 'icio' object.

References

Koopman, R., Wang, Z., & Wei, S. J. (2014). Tracing value-added and double counting in gross exports. American Economic Review, 104(2), 459-94.

Wang, Zhi, Shang-Jin Wei, and Kunfu Zhu (2013). Quantifying international production sharing at the bilateral and sector levels (No. w19677). National Bureau of Economic Research.

See also

wwz, kww, icio-package

Author

Sebastian Krantz

Examples

# Load example data
data(leather)

# Create intermediate object (class 'icio')
m <- load_icio(leather)
 
# Perform the WWZ decomposition
WWZ <- wwz(m)

# Obtain a disaggregated KWW decomposition
KWW <- wwz2kww(WWZ)

# Aggregate KWW 
wwz2kww(WWZ, aggregate = TRUE)
#>      Country  DVA_FIN  DVA_INT DVA_INTrex   RDV_FIN   RDV_INT       DDC
#>       <fctr>    <num>    <num>      <num>     <num>     <num>     <num>
#> 1: Argentina 19.34940 18.97119   8.411491  5.259501 0.8259724 0.8723949
#> 2:    Turkey 43.39461 26.20678   7.740053 10.475795 2.0075781 2.6369363
#> 3:   Germany 78.73101 15.23967   2.748464  5.689669 4.4335916 4.4481800
#>      FVA_FIN  FVA_INT      FDC
#>        <num>    <num>    <num>
#> 1:  3.450595 3.388617 3.770832
#> 2: 10.205386 5.359698 5.573163
#> 3: 26.668992 4.455024 5.185401

# Same as running KWW directly, but the former is more efficient 
# if we already have the WWZ
kww(m)
#>      Country  DVA_FIN  DVA_INT DVA_INTrex   RDV_FIN   RDV_INT       DDC
#>       <fctr>    <num>    <num>      <num>     <num>     <num>     <num>
#> 1: Argentina 19.34940 18.97119   8.411491  5.259501 0.8259724 0.8723949
#> 2:    Turkey 43.39461 26.20678   7.740053 10.475795 2.0075781 2.6369363
#> 3:   Germany 78.73101 15.23967   2.748464  5.689669 4.4335916 4.4481800
#>      FVA_FIN  FVA_INT      FDC
#>        <num>    <num>    <num>
#> 1:  3.450595 3.388617 3.770832
#> 2: 10.205386 5.359698 5.573163
#> 3: 26.668992 4.455024 5.185401