When a country exports, how much of the value was actually made there — and how far does the usual export statistic mislead us?
Five Facts about Value-Added Exports and Implications for Macroeconomics and Trade Research
Robert C. Johnson (2014) · Journal of Economic Perspectives 28(2)
Article ↗ · Replication data ↗ (openICPSR)
The archive requires an account we do not hold, so the files were not opened. What follows rests on the published abstract and on this platform's own observations.
What the authors found
Johnson shows that because production is split across supply chains, gross exports overstate what a country actually contributes. He puts the gap between gross and value-added exports at roughly 25 per cent and growing, and shows that manufacturing looks more important relative to services in gross terms than in value-added terms — so the standard statistic distorts not only how big trade is but what it is made of.
What our data adds
Computed independently on Eurostat FIGARO for 2024, across 27 EU reporters, domestic value added is 63.4 per cent of gross exports. Foreign content is therefore 36.6 per cent — larger than the roughly 25 per cent Johnson reported a decade ago, which is the direction he predicted. The spread between countries is wider than the average suggests: Germany retains 73.8 per cent of the value it ships, Spain 72.5, while Ireland retains 52.2 and Belgium 54.6. A ranking of exporters by gross value and one by value added are not the same ranking, and the gap is biggest exactly where the policy interest is.
Published in thousands of euro against gross exports in millions - the unit trap the note describes.
| Figure | Value | Indicator |
|---|---|---|
| Domestic value added as a share of gross exports, EU27, 2024 | 63.4% | FIGARO.DVA_EXP |
| Implied foreign content | 36.6% | FIGARO.GROSS_EXP |
| Germany, value added retained | 73.8% | FIGARO.DVA_EXP |
| Ireland, value added retained | 52.2% | FIGARO.DVA_EXP |
Every figure here is computed from observations in this database and can be charted, downloaded or queried.
What this cannot show
These two numbers are not directly comparable and should not be read as a measured trend. Johnson's 25 per cent is global and rests on mid-2000s input-output tables; ours is 27 EU reporters in 2024, an economy more fragmented than the world average. The comparison is suggestive of the direction, not a measurement of it. Note also the unit trap this dataset sets: FIGARO publishes gross exports in millions of euro and value added in thousands, so comparing the two columns without converting is wrong by a factor of a thousand and produces plausible-looking numbers.