Decomposition of GDP by country/industries Which types of value-adaedproduction and trade activities belong to GVC? VAX(J&N)=2+30 A country/sector's total ahue-added Production for foreign demand (GDP by ndustry) 1+3b=Production for domestic demand D VA(KWW)=2+3=GDP in exports In production of fnal In production of value In production of vahe- oducts to domesti added in fial goods added in ntermediate market directiy drectly 1-V D 2-V RT In intermediates indirectly In intermediates directly In intermediates that absorbed by importing absorbed by direct finally return to home country or re-exported to countries third countries 3a-V GVC R 3b.V GVC D=RDV F L V GVC F Simple cross country Complex cross cour production sharing production sharingDecomposition of GDP by country/industries Which types of value-added production and trade activities belong to GVC? VAX(J&N) =2+ 3c= Production for foreign demand ; 1+3b =Production for domestic demand. DVA(KWW) = 2 + 3 = GDP in exports ; . Complex cross country production sharing A country/sector’s total value-added (GDP by industry) In production of value added in final goods exports directly 2-V_RT In production of final products to domestic market directly 1-V_D In intermediates that finally return to home countries 3b.V_GVC_D=RDV_F In production of value￾added in intermediate exports 3-V_GVC In intermediates indirectly absorbed by importing country or re-exported to third countries 3c.V_GVC_F In intermediates directly absorbed by direct importers 3a-V_GVC_R Simple cross country production sharing 0 1 1 ≥2