Working Papers present research work by both Danmarks Nationalbank’s employees and our partners. Working Papers are primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.
Working paper: Global Value Chains
A final product is created through a chain of activities that add value to the product. We analyse the importance of global value chains for Danish trade and employment. We track through which industries Danish value added is exported and where it is finally consumed. We are furthermore able to link Danish employment to final consumption in partner countries.
Using the World Input-Output Database containing data on sales and purchases for 35 industries in 40 countries, we analyse the importance of global value chains. In particular, we analyse the importance of global value chains for Danish trade and employment. We track through which industries Danish value added is exported and where it is finally consumed. We are furthermore able to link Danish employment to final consumption in partner countries. We find that the share of foreign value added in Danish exports has increased mainly driven by a larger share of value added created outside the euro area. The manufacturing industries play a key role in exporting Danish value added and more Danish value added end up being consumed in the United States, the United Kingdom and China than indicated by the share of Danish gross export to these countries. We furthermore find that a significant number of Danish jobs in both exporting and domestic market-oriented industries can be ascribed to exports, and that final consumption in China has become increasing important to Danish employment, while the importance of German final consumption has declined.