Evolution and Motivation of the Value-Added Trade Pattern of Producer Services Based on a Complex Network

Abstract

With the acceleration of the digital revolution and free trade, the producer services industry has become a new driving force for countries to enhance their global value chain (GVC). The further integration of GVCs has promoted the formation of a global value network covering a wider range of regions and industries. The way of establishing strong core capabilities and competitive advantages for a country’s producer services industry in the vast value network is of great practical significance for achieving industrial structure transformation and upgrading in an open economy. Therefore, based on the Asian Development Bank Multi-Regional Input–Output Database (ADB-MRIO) and the bilateral export value-added accounting method (WWZ), this study constructs a value network of producer services and analyzes its structural evolution and driving factors. The results show the following: (1) The domestic value-added (DVA) network and foreign value-added (FVA) networks of producer services trade exhibit dense characteristics in terms of trade depth. The DVA network has a small-world topological structure, while the FVA network does not have this feature most years. (2) Western countries, represented by the USA, Germany, and the UK, are located at the hub of the global value network, while China’s network status is rising and gradually occupying a core position not only in the Asian region but also in the world. The value chain of producer services shows a pattern of being led by developed countries and extending to developing countries. (3) The broader tendency of modularity is decreasing, indicating that the development process of the DVA and FVA networks is becoming globalized. The members of the community can not only achieve trade interdependence due to geographical proximity but also break through regional limitations and complement each other. (4) The network evolution process is driven by a variety of factors. Industrial and technological distances are conducive to the expansion of the global value flow in producer services. Geographical and linguistic proximity are the main influencing factors, while the role of institutional proximity tends to be weakened.

Keywords

• producer services trade
• decomposition of value-added trade
• complex network analysis
• MRQAP analysis