Bhanupong Nidhiprabha: With a growing volume of network trade all over the world, volumes of trade in parts and components have become increasingly more important than trade in final products. Thus, the measurement of competitiveness should be based on the value-added of the export commodities rather than the gross values of the commodities. In other words, we have to take into account the imported intermediate products to get true pictures of a country's trade competitiveness.
The authors extended the work of Timmer et al. (2013) by focusing on the role of domestic demand and labor employment generated by trade expansion. The authors focused on China, India, Indonesia, Japan, South Korea, and Taiwan, using these six Asian countries to compare with the United States and Germany. As expected, the authors found that gross exports overestimated competitiveness when industries relied heavily on imported intermediate inputs.
The authors measure competitiveness using...