Archive:Value added content in EU exports - an analysis with FIGARO data
Data extracted in July 2022.
Planned article update: July 2023.
Highlights
In 2020, €1 962 billion of value added in the EU was supported by exports to non-member countries, equivalent to 16 % of the €12 032 billion total value added in the EU.
The EU Member State with the highest share of value added supported by EU exports is Ireland (40 %).
Germany was by far the largest contributor to export-supported value added spillover in the rest of the EU: in 2020, €68.5 billion of value added in EU Member States other than Germany was supported by German exports.
Manufacturing exports supported €1 177 billion of value added in the EU in 2020, 60 % of all export-supported value added. Three fifths (61 %) of the value added supported by manufacturing exports was within manufacturing itself.
Share of value added in each EU Member State supported by EU exports, 2020
The production of goods and services requires inputs which may have been sourced domestically or globally. The final value of a product may well reflect value that has been added in many different stages of the production chain, potentially in many different countries; this fact is not always visible in conventional trade statistics, which generally reflect the total value of a product when traded.
An analysis of the value added by each country when producing goods and services that are then traded can provide insight into international trade relations. This article aims to provide an indication of the relationship between value added in the European Union (EU) and the EU’s exports. This is done by analysing the value added content of EU exports at a detailed industry [1] level.
The article provides an overview of the data compiled using the FIGARO tables – full international and global accounts for research in input-output analysis – and the Leontief input-output model (Miller and Blair, 2009). For more information, see the Data Sources and Context sections below.
Full article
Whole economy – all industries combined
Level and share of value added
The level of value added in the EU or in individual EU Member States supported by exports includes not only value added by enterprises that are directly exporting, but also by those providing goods and/or services to support the production of exported goods and services; in other words, it also includes value added by upstream enterprises. This may concern value added by enterprises in the same industry as the exporter or in a different one (depending, in part, how detailed an activity classification is used). Equally, exports by enterprises in one Member State may support value added in that Member State or in a different one.
Regardless of whether presenting data for the EU as a whole or for individual EU Member States, all references to exports in this article concern exports to non-member countries, in other words extra-EU exports; trade between Member States is not considered.
Overall, €1 962 billion of value added in the EU in 2020 was supported by exports to non-member countries (Table 1). This export-supported value added was 16.3 % of all value added (€12 032 billion).
Germany was the EU Member State with the highest value added supported by EU exports: in 2020, €548.1 billion of value added in Germany was supported by exports from the EU, including Germany itself. The level of export-supported value added in Germany was more than the combined level of export-supported value added in France (€259.7 billion) and Italy (€208.5 billion), which had the second and third highest levels (see Table 1). As a share of total value added, the value added in each of the EU Member States supported by EU exports to non-member countries ranged from just under one tenth in Croatia (9.5 %) to three tenths in Luxembourg and Malta (both 30.0 %) and peaked at two fifths in Ireland (40.4 %).
In addition to estimating export-supported value added in each EU Member State, FIGARO also provides insight into the value added anywhere in the EU that is supported by the exports from a particular EU Member State. Figure 1 compares these two indicators. The figure has been ranked on the difference between the two indicators.
The EU Member States on the left-hand side of Figure 1 are those that benefit more (in value added terms) from exports from all Member States than the value added they support in the whole EU through their own exports: in other words, they are net beneficiaries from cross-border spillover effects (see Box 1). For example, €72.2 billion of value added in Poland was supported by exports from all Member States (including Poland), whereas €57.6 billion of value added across the EU (some of which in Poland) was supported by exports only from Poland; the difference – with Poland being a net beneficiary – was €14.6 billion. Similarly, all three Baltic EU Member States were net beneficiaries from spillover effects, as were the eastern Member States (with the exceptions of Slovakia and Hungary), together with Germany, Spain, the Netherlands, France, Greece and Sweden.
Conversely, the EU Member States on the right-hand side of Figure 1 are those that benefit less (in value added terms) from exports of all Member States than the value added they support in the whole EU through their own exports: these Member States are therefore net contributors of cross-border spillover effects. As an example, €208.5 billion of value added in Italy was supported by EU exports (including from Italy), whereas €216.5 billion of value added across the EU (some of which in Italy) was supported by exports from Italy alone; the difference was €8.1 billion, making Italy the highest net contributor. Other large net contributors of spillover effects were Ireland and Luxembourg with differences of €7.8 billion and €7.5 billion, respectively (Figure 1).
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Figure 2 focuses on the change in value added within each EU Member State (supported by exports from anywhere in the EU). All of the Member States recorded an increase in export-supported value added between 2010 (during recovery from the global financial and economic crisis) and 2020 (at the beginning of the COVID-19 crisis).
The share of export-supported value added in total value added in the EU increased from 13.6 % in 2010 to 16.3 % in 2020. Overall, export-supported value added in the EU increased by €619.3 billion during this period. Just over one quarter of the increase (€170.3 billion of value added; 27.5 % of the EU total) was located in Germany, with the next largest increases in Ireland (€89.2 billion of value added; 14.4 % of the EU total), France (€64.5 billion of value added; 10.4 % of the EU total) and Italy (€64.4 billion of value added; 10.4 % of the EU increase).
In relative terms, the largest increases in export-supported value added between 2010 and 2020 were in Ireland (up 171.9 %), Malta (128.0 %), Bulgaria (107.0 %), Romania (100.6 %) and Lithuania (95.6 %), while increases of at least 50.0 % were also observed in eight other EU Member States.
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Domestic and spillover effects
The share of export-supported value added within each EU Member State can be divided up into two parts – the domestic effect and the spillover effect – with a further division of the domestic effect between direct and indirect effects: see Box 1 for more information. The share of total value added in each Member State that is related to these effects is presented in Figure 3.
Box 1: What are domestic and spillover effects?
The domestic effect is value added in a given EU Member State that is supported by its own exports. This value added may be in the same industry as the one that exports the goods or services (direct domestic effect) or in another industry (indirect domestic effect). As such, the indirect domestic effect is effectively an industry spillover effect within a single EU Member State – it is the value added in a particular industry that is supported by the exports of a different industry (within the same Member State).
In this article, the split of the domestic effect into a direct and indirect effect is based on an analysis of the economy dividing it into 21 different industries (according to the EU’s activity classification called NACE).
The spillover effect reflects the value added in a given EU Member State that is supported by the exports of other Member States. For example, it includes value added in a Member State engaged in the production of intermediate inputs to be used in other Member States’ exports to non-member countries.
In 2020, the direct domestic effect accounted for 8.4 % of total value added in the EU Member States, while the indirect domestic effect accounted for 5.1 % and the spillover effect for 2.9 % (see Figure 3).
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Among the EU Member States, the largest contribution to total value added of the direct domestic effect occurred in Ireland, at 28.6 %. This effect also contributed more than 10.0 % of value added in Malta, Cyprus, Luxembourg, Denmark and the Netherlands. The lowest contribution was in Croatia, at 4.3 %. The largest contributions to total value added of the indirect domestic effect were also in Luxembourg, Malta, Ireland and Cyprus, with shares between 9.1 % and 6.8 %. The smallest contribution occurred again in Croatia, at 2.3 %. As to spillover effects, the largest contribution to total value added was in Luxembourg (6.9 %), followed by Slovenia (5.5 %), Lithuania (5.3 %) and Poland (5.2 %) – see Map 1. The smallest contributions were in France (1.9 %) and Italy (1.8 %).
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The direct domestic effect accounted for 51.2 % of all export-supported value added across the EU Member States in 2020. This effect was dominant (among the three effects shown in Figure 3) in all EU Member States, accounting for more than half of export-supported value added in 12 Member States. Close to three fifths of export-supported value added was due to the direct domestic effect in Cyprus (58.0 %), Denmark (58.5 %) and Malta (59.6 %), with this share peaking at 70.8 % in Ireland.
The indirect domestic effect accounted for 31.2 % of all export-supported value added in the EU Member States in 2020. This was the second largest effect in most EU Member States; in Latvia, Croatia, Austria, Czechia, Slovakia, Lithuania, Estonia, Hungary, Poland and Slovenia the spillover effect was larger. It accounted for one fifth to one third of export-supported value added in most Member States. Hungary (19.6 %) and Ireland (18.4 %) reported lower shares, while the four largest Member States reported higher shares: Germany (33.8 %), France (35.5 %), Spain (36.3 %) and Italy (41.5 %).
Finally, the spillover effect accounted for 17.5 % of all export-supported value added in the EU Member States in 2020. This effect accounted for 10.8 % of export-supported value added in Ireland and also less than 15.0 % in Malta, Italy and Germany. In France, the share was 15.1 % and therefore the spillover effect was relatively small in each of the three largest EU Member States. The spillover effect accounted for more than one quarter of export-supported value added in 10 Member States, peaking at close to one third (33.2 %) in Poland.
Export-supported value added from the domestic and spillover effects are shown in absolute values for 2020 in Table 2. Value added from the domestic effect is shown in the shaded cells running in a diagonal line from the top left to the bottom right of the table.
The largest level of export-supported value added resulting from the domestic effect was clearly in Germany, where €470.2 billion of value added was supported by Germany’s own exports, with the next largest domestic effects observed in France (€220.5 billion) and Italy (€182.2 billion).
The single largest spillover effect between any pair of countries in 2020 was the €10.1 billion of value added in Germany supported by Italian exports. Three other country pairings had spillover effects valued at €8.0 billion or more:
- €9.8 billion of value added in Germany supported by French exports;
- €9.3 billion of value added in France supported by German exports;
- €8.0 billion of value added in Germany supported by Dutch exports.
Germany was by far the largest contributor of export-supported value added resulting from spillover effects: €68.5 billion of value added in 2020 in EU Member States other than Germany was supported by German exports. Out of this figure, €9.3 billion was in France, while Italy (€7.7 billion), the Netherlands (€7.7 billion), Poland (€6.4 billion), Austria (€5.3 billion), Spain (€4.9 billion) and Ireland (€4.2 billion) all had more than €4.0 billion of value added supported by German exports. For comparison, the next highest contributors to value added spillover from exports were France (€37.4 billion of value added in other Member States), Italy (€34.4 billion) and the Netherlands (€26.4 billion).
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Industries
Whereas Table 2 focused on value added in EU Member States supported by exports, Table 3 provides a similar analysis for industries. This presentation reveals the extent to which value added in specific industries depends on exports from the same industry or from other (downstream) industries. Unlike Table 2, Table 3 does not show absolute levels of value added but instead presents value added shares. The shares in each column sum to 100 %: each column shows the distribution (among the industries where value is added) of the value added that is supported by exports from a specific industry.
The share of export-supported value added within the same industry as the exporting industry is shown in the shaded cells running in a diagonal line from the top left to the bottom right of the table. The highest share [2] was observed for education: in 2020, 86.3 % of all value added in the EU supported by exports from this industry was generated in the education industry itself. The 20 other industries received the remaining 13.7 %, with the administrative and support service activities industry as the largest beneficiary (2.0 %) of export-supported value added from industrial spillover effects.
By contrast, 50.5 % of the value added supported by exports from the construction industry was added in the same industry, the lowest share of any industry. Some 15.1 % of the value added supported by exports from the construction industry was added in manufacturing, 8.1 % in distributive trades and 7.2 % in professional, scientific and technical activities (which includes, among others, the activities of notaries, architectural and engineering services).
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The single largest industrial spillover effect between any pair of industries was the 15.1 % noted above for value added in manufacturing supported by exports from the construction industry. Five other industry pairings had industrial spillover effects exceeding 8.0 % of value added supported by exports from a particular industry:
- 11.2 % of the value added supported by agriculture, forestry and fishing exports was in manufacturing and 8.7 % in distributive trades;
- 11.1 % of the value added supported by arts, entertainment and recreation exports was in information and communication;
- 8.8 % of the value added supported by manufacturing exports was in distributive trades.
- 8.1 % of the value added supported by construction exports was in distributive trades.
In absolute terms, the picture is somewhat different, as manufacturing exports alone supported €1 177 billion of value added in the EU in 2020, equivalent to three fifths (60.0 %) of all export-supported value added in the EU. €714.5 billion of this total was added within manufacturing itself, with the remaining €462.3 billion representing the industrial spillover effect within the other 20 industries. The 11 largest industry pairings for export-supported value added resulting from industrial spillover effects all concerned value added in industries outside the manufacturing industry itself that were supported by manufacturing exports. For example, €103.4 billion of value added in distributive trades was supported by manufacturing exports (see Figure 4).
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The largest pairing of industrial spillover effects that did not involve manufacturing was the €11.4 billion of value added in transportation and storage activities supported by exports from distributive trades.
Table 4 identifies for each EU Member State which two industries had the highest level of export-supported value added. In 23 Member States, manufacturing had the highest level of export-supported value added in 2020, while there was one Member State where manufacturing had the second highest level. The relatively small Member States of Cyprus, Luxembourg and Malta were the only exceptions where manufacturing was not one of the two industries with the highest level of export-supported value added. The next most relevant industry was distributive trades, which had the second highest level of export-supported value added in 12 Member States.
Five other industries appear in Table 4:
- transportation and storage in Estonia, Greece, Latvia, Lithuania, Portugal and Slovenia;
- financial and insurance activities in Cyprus and Luxembourg;
- information and communication in Ireland, Cyprus, Romania, Finland and Sweden;
- administrative and support service activities in Belgium, Luxembourg, Hungary and Malta;
- arts, entertainment and recreation in Malta.
Earlier it was noted that a considerable level of value added in other industries is supported by exports from the manufacturing industry. Still, in most EU Member States – including the largest ones – manufacturing had the highest absolute level of value added that was supported by exports (from any industry), as can be seen from Map 2.
Source data for tables and graphs
Value added content in EU exports: tables and figures
All FIGARO data for value added are available from the following files:
Data sources
FIGARO tables are a statistical product of the integrated global accounts for economic modelling. They link national accounts and data on business, trade and jobs for the EU Member States, the United States and 17 main EU trading partners (Argentina, Australia, Brazil, Canada, China, India, Indonesia, Japan, Mexico, Norway, Russia, Saudi Arabia, South Africa, South Korea, Switzerland, Turkey and the United Kingdom) represented in the OECD ICIO (inter-country input-output tables); a ‘rest of the world’ region completes the FIGARO tables.
Internationally, the FIGARO tables contribute to the OECD ‘Global regional TiVA initiative’ and the compilation of the OECD global inter-country input-output tables by providing data for the EU and its Member States.
The FIGARO tables present the relationship between economies at a detailed level of 64 industries and 64 products, as defined in the ‘ESA 2010 National accounts transmission program’.
Frequency and availability
FIGARO tables are available from 2010 to 2020 (period T–24 months, T being the year of release). As of 2021, they are produced and updated annually. The time series is in line with the latest macroeconomic aggregates.
More information
For more information, please refer to the FIGARO dedicated section.
Context
Partners
The FIGARO tables result from a collaborative project between Eurostat and the European Commission’s Joint Research Centre.
The FIGARO tables contribute to the OECD’s global inter-country input-output tables published under the TiVA initiative, which considers the value added by each country in the production of goods and services that are consumed worldwide.
Purpose
FIGARO tables provide the first official inter-country supply, use and input-output data for the EU. They are a tool for analysing the social, economic and environmental effects of globalisation. These may be analysed through studies on competitiveness, growth, productivity, employment, environmental footprint and international trade (for example, analyses of global value chains).
The tables are used to evaluate EU policies and assess the economic interdependencies of the EU (or the euro area or individual EU Member States) in a globalised world.
Notes
Direct access to
- Data can be accessed through the dedicated section as csv files and Rdata files.