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Distinguishing Between Imports for Domestic Use and for Re-Exports: A Novel Method Illustrated for the Netherlands

Published online by Cambridge University Press:  01 January 2020

Oscar Lemmers  and
Khee Fung Wong
Oscar Lemmers*
Affiliation:
Statistics Netherlands.
Khee Fung Wong*
Affiliation:
Statistics Netherlands.
*
E-mail: o.lemmers@cbs.nl and k.wong@cbs.nl
E-mail: o.lemmers@cbs.nl and k.wong@cbs.nl
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Abstract

Global trade in the 21st century is characterised by complex value chains. Successful exporters usually rely on quality imports, and exported goods cross borders many times before reaching their final consumer. This poses challenges to economic measurement as well as policymaking because it becomes difficult to characterise the true interdependencies between countries. Currently, estimates of the share of imports from a trade partner destined for re-exports, and the share used in the domestic economy, are crude at best. We develop a novel approach to estimate these shares. Instead of assigning imports for re-exports proportionally across all source countries, we consider the origin of imports for each trader who re-exports goods. The method is illustrated for the Netherlands, a major re-exporter. We find that non-European member states export 10 billion euros of commodities to the Netherlands that are destined for re-export to the United Kingdom. We also find that the goods trade deficit between the Netherlands and the United States is drastically reduced when taking re-export flows into account.

Keywords

Re-exportsglobal value chainsmicro dataRotterdam effectBrexitF14F62O52
Type
Research Articles
Information
National Institute Economic Review , Volume 249 , August 2019 , pp. R59 - R67
Copyright
Copyright © 2019 National Institute of Economic and Social Research

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Footnotes

The views expressed in this paper are those of the authors and do not necessarily represent the policies of Statistics Netherlands. The authors thank Bart Loog, Marta Paczos, participants of the 2019 ESCoE Conference on Economic Measurement and anonymous referees for valuable discussion and suggestions. Any errors that remain are the responsibility of the authors. The paper is based on the more extensive paper of Lemmers and Wong (2019).

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