kww: Koopman-Wang-Wei Decomposition of Gross Exports

In decompr: Global Value Chain Decomposition

Koopman-Wang-Wei Decomposition of Gross Exports

Description

This function performs the Koopman-Wang-Wei (2014) decomposition of a countries gross exports into 9 separate value added components.

Usage

kww(x)

Arguments

x	an object of the class 'decompr' obtained from load_tables_vectors.

Value

A data frame where a countries gross exports is decomposed into 9 components (columns), as detailed in Figure 1 of the AER paper:

Term			Description
DVA_FIN			Domestic VA in final goods exports.
DVA_INT			Domestic VA in intermediate exports absorbed by direct importers (used to produce a locally consumed final good).
DVA_INTrex			Domestic VA in intermediate exports reexported to third countries and absorbed there.
RDV_FIN			Domestic VA in intermediate exports that returns home via final imports.
RDV_INT			Domestic VA in intermediate exports that returns home via intermediate imports (used to produce a domestically consumed final good).
DDC			Double counted DVA in intermediate exports (arising from 2-way trade in intermediate goods).
FVA_FIN			Foreign VA in final goods exports.
FVA_INT			Foreign VA in intermediate exports.
FDC			Double counted FVA in intermediate exports (arising from 2-way trade in intermediate goods).

Note

The KWW decomposition is known to be biased. As shown by Borin and Mancini (2019), it systematically underestimates the foreign value added in exports – and correspondingly overstates foreign double counting – because the entire foreign content that the direct importer re-exports to third countries is classified as 'foreign double counted', including the part (value added generated in the importing country and re-exported onwards) that is never recorded as foreign value added in any other flow. KWW also overlooks the bilateral dimension of trade, so it cannot correctly split domestic value added between absorption by the direct importer and by third markets (hence indicators such as DAVAX cannot be derived from it). Borin and Mancini (2019) correct these issues using a sink-based, world-level perspective for the foreign content of exports; this corrected KWW decomposition is available as bm(x, perspective = "world", approach = "sink").

Author(s)

Sebastian Krantz

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.

Borin, A., & Mancini, M. (2019). Measuring What Matters in Global Value Chains and Value-Added Trade. World Bank Policy Research Working Paper 8804.

See Also

bm, wwz, wwz2kww, decompr-package

Examples

# Load example data
data(leather)

# Create intermediate object (class 'decompr')
decompr_object <- load_tables_vectors(leather)
 
# Perform the KWW decomposition
kww(decompr_object)

decompr documentation built on June 9, 2026, 5:09 p.m.