Kei-Mu Yi: Global Value Chains - Firm-Level Evidence from the United States

The program for Trade, Development and Political Economy welcomes Kei-Mu Yi from the University of Houston.

Using newly linked confidential microdata from the U.S. Census Bureau, we provide a granular view of U.S. global value chains (GVC) between 2002 and 2017.  Linking the source country of input imports with the destination country of exports at the establishment level, we reveal new patterns of multi-country supply chains connected to the United States.  First, we find that for every dollar of exports, imported inputs represented 13 cents in 2002 and over 20 cents by 2017.  Second, we find complementarities between input and output markets, specifically, a very strong role of so-called “round-trip'' trade linkages where an establishment imports inputs from and exports output to the same country.  Third, we find a strong positive association between regional trade agreements and GVC flows.  We contrast these new results to those that would be obtained from alternative measures of GVCs—such as those built from combining national-level input-output tables—and quantify the role of aggregation bias and proportionality assumptions on multi-country supply chain measurement.  Finally, we highlight key features of canonical models of GVCs that could rationalize these empirical findings.

Kei-Mu Yi is the M. D. Anderson Chair in Economics at the University of Houston.  Before joining UH, Yi was employed by the Federal Reserve Bank of Minneapolis where he served as a special policy advisor to the president. Yi is a noted expert in the fields of international trade and macroeconomics. He has published seminal articles on the importance of vertical production linkages for international trade flows and is considered one of the founders of the analysis of “offshoring.” His publications appear in prestigious economics journals such as the American Economic Review, the Journal of Political Economy, the Journal of International Economics and many more.  He earned a Ph.D. in economics at the University of Chicago and BS in economics at MIT.