In this paper we construct an extended non‐competitive input‐occupancy‐output model that captures China's processing trade and also develop a methodology to estimate the domestic value‐added and employment generated by each unit of total exports, of exports by sector, and of exports by commodity, respectively. We also prove mathematically that the gross value of exports is equal to the sum of total value added and total imports. Based on the methodology proposed here, we compile the 2002 extended Chinese non‐competitive input‐occupancy‐output table and the United States non‐competitive input‐occupancy‐ output table, and then estimate and analyze the effects of China's exports and US exports on their respective domestic value added and employment.
This is a translated version of the paper published in Chinese in Social Sciences in China (中国社会科学, 2007, no. 5, pp. 91-103), which has received the “Pei-Kang CHANG Development Economics Award” and “Sun Yefang Economics Award.” Financial support received from Chinese University of Hong Kong and National Natural Science Foundation of China (No. 70810107020, 70871108, 60474063).
- non-competitive (import) input-occupancy-output model
- processing exports
- non-processing exports
- domestic value added