Archive:Value added content in EU exports - an analysis with FIGARO data
Data extracted in June 2021.
Planned article update: 6 September 2022.
Highlights
In 2019, EUR 2 585 billion of value added in the EU was supported by exports to non-member countries, equivalent to just over one fifth of the EUR 12 476 billion total value added in the EU.
As a share of total value added, the value added in each of the EU Member States that was supported by exports from any of the EU Member States peaked at 50.7 % in Ireland.
Germany was by far the largest ‘contributor’ of export-supported value added resulting from spillover effects: in 2019, EUR 58.1 billion of value added in EU Member States other than Germany was supported by German exports.
Manufacturing exports supported EUR 1 627 billion of value added in the EU in 2019, 62.9 % of all export-supported value added. Three fifths (59.9 %) of the value added supported by manufacturing exports was within manufacturing itself.
Share of value added in each Member State supported by the exports of all Member States to non-member countries, 2019
The production of goods and services is based on 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 more information on international trade relations. The aim of this article is to provide an indication of the relationship between value added and trade in the European Union (EU), by analysing the value added content of EU exports at a detailed industry [1] level.
The article aims to give 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 that is supported by exports includes not only value added by enterprises that are directly exporting, but also by other enterprises which provide goods or services that support the production of exported goods and services; in other words, value added by upstream enterprises is also included. 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 the same Member State or in a different one.
It should be noted that, 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.
In 2019, EUR 2 585 billion of value added was supported by exports to non-member countries. In relative terms, this export-supported value added was 20.7 % of total value added (EUR 12 476 billion), equivalent to just over one fifth of the value added across the EU.
In absolute terms, Germany was the EU Member State with the highest level of value added supported by exports from any of the EU Member States: in 2019, EUR 745.2 billion of value added in Germany was supported by exports from the EU, including exports from Germany itself. The level of export-supported value added in Germany was more than the combined level of export-supported value added in France (EUR 369.2 billion) and Italy (EUR 290.6 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 that was supported by exports from any of the EU Member States ranged from just over one tenth of the value added in Portugal (11.7 %) to three tenths in Malta (30.0 %), more than one third in Luxembourg (36.6 %) and peaked at just over half in Ireland (50.7 %).
As well as the export-supported value added indicator shown in Table 1, a second indicator has been compiled, which shows the level of 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 the figure are ones that benefit more (in value added terms) from exports from other Member States than the value added they support in other Member States through their own exports: in other words, they are net beneficiaries from cross-border spillover effects (see Box 1 for an explanation of domestic and spillover effects). For example, EUR 160.7 billion of value added in Spain was supported by exports from any of the EU Member States (including from Spain), whereas EUR 152.0 billion was added across the EU (some of which was in Spain) and supported by exports from Spain; the difference was EUR 8.7 billion. All three Baltic Member States were net beneficiaries from spillover effects, as were all of the eastern Member States except for Czechia and Hungary, as well as Portugal, Greece and Spain from among the southern Member States, Austria, France and Ireland from among the western Member States, and Sweden from among the Nordic Member States.
The EU Member States on the right-hand side of Figure 1 are those that benefit less in value added terms from exports from other Member States than the value added they support in other Member States through their own exports: these Member States are therefore net contributors of cross-border spillover effects. For example, EUR 290.6 billion of value added in Italy was supported by exports from any of the EU Member States (including from Italy), whereas EUR 308.8 billion was added across the EU (some of which was in Italy) and supported by exports from Italy; the difference was EUR 18.2 billion.
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Figure 2 focuses on export-supported 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 (which was during the recovery from the global financial and economic crisis) and 2019 (just before the COVID-19 crisis).
The share of export-supported value added in total value added in the EU increased from 16.9 % in 2010 to 20.7 % in 2019. Overall, export-supported value added in the EU increased by EUR 918.6 billion during this period. Just over one quarter of the increase (EUR 247.5 billion of value added; 26.9 % of the EU total) was located in Germany, with the next largest increases in France (EUR 121.9 billion of value added; 13.3 % of the EU total), Ireland (EUR 104.1 billion of value added; 11.3 % of the EU total) and Italy (EUR 99.6 billion of value added; 10.8 % of the EU total).
In relative terms, the largest increases in export-supported value added between 2010 and 2019 were in Ireland (up 158.6 %), Lithuania (139.0 %), Malta (137.4 %) and Luxembourg (103.8 %), while increases of at least 50.0 % were also observed in 13 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 received — 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 supported by these effects is presented in Figure 3.
Box 1: What are domestic and spillover effects?
The spillover received 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.
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 exported the goods or services — direct, or
- in another industry — indirect.
As such, the indirect domestic effect is effectively a spillover effect within a single EU Member State — it is 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 analysis splitting the domestic effect into a direct and indirect effect has been based on an analysis of the economy dividing it into 21 different industries (the section level of the EU’s activity classification called NACE). Examples of industries at this level of detail are manufacturing, distributive trades, or information and communication services. If a more detailed level of classification would be used, then the direct domestic effect would be smaller and the indirect domestic effect would be larger. For example, it is common for manufactured goods to pass through several stages of processing (each resulting in an intermediate good) before being completed (typically as a capital or consumer good). If the final good is exported by the manufacturing industry, export-supported value added in upstream manufacturing processes in the same Member State would be considered as being supported by the direct domestic effect when manufacturing is considered as being just one industry; if the analysis is done at a finer level of detail, with manufacturing divided up into several industries, some of the upstream value added may be in manufacturing industries that are different from the exporting manufacturing industry, and would therefore be considered as being supported by the indirect domestic effect.
For example, dividing the whole economy into 64 different industries, manufacturing is divided into 19 divisions (or regroupings of divisions). In 2017 in Germany, exports from one of these, the manufacture of motor vehicles, trailers and semi-trailers, supported EUR 13.3 billion of value added in other manufacturing activities within Germany. This value added is considered as part of the direct domestic effect when analysing the economy in 21 industries (as all of manufacturing is considered to be one industry), but part of the indirect domestic effect when analysing the economy in 64 industries.
The direct domestic effect accounted for 12.3 % of total value added in the EU in 2019, while the indirect domestic effect accounted for 6.1 % and the spillover received effect 2.3 % (see Figure 3).
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Among the EU Member States, the largest contributions to total value added of the direct domestic effect were in Ireland (37.7 %) and Luxembourg (21.4 %); this effect contributed 10.0 % or less of value added in 11 Member States, with the lowest contribution in Portugal (6.5 %). The largest contribution to total value added of the indirect domestic effect was also in Ireland (9.4 %), followed by Malta (8.7 %); the smallest contribution was again in Portugal (3.4 %). The largest contribution to total value added of the spillover received effect was in Luxembourg (8.7 %), followed by Slovakia (5.3 %); the smallest contribution was in Italy (1.2 %) — see Map 1.
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The direct domestic effect — in other words, value added in an industry in a specific EU Member State that is supported by exports from that same industry in that same Member State — accounted for 59.6 % of all export-supported value added across the EU in 2019. The direct domestic effect was the largest effect in all EU Member States, accounting for more than half of export-supported value added except in Romania and Slovakia (where the share was 49.5 % and 46.2 % respectively). More than three fifths of export-supported value added was due to the direct domestic effect in Hungary (61.1 %), Germany (62.6 %) and Denmark (64.4 %), with this share peaking close to three quarters (74.4 %) in Ireland.
The indirect domestic effect accounted for 29.5 % of all export-supported value added in the EU in 2019. This was the second largest effect (among the three shown in Figure 3) in all EU Member States except for Croatia, Luxembourg, Hungary, Austria, Slovenia and Slovakia (where the spillover received effect was larger). The indirect domestic effect accounted for one fifth to one third of export-supported value added in most Member States, with Hungary (19.4 %), Ireland (18.6 %) and Luxembourg (17.8 %) reporting lower shares, and Spain (34.5 %) and Italy (36.1 %) reporting higher shares.
The spillover received effect accounted for 10.9 % of all export-supported value added in the EU in 2019. The spillover received effect accounted for 6.5 % of export-supported value added in Italy and also less than 10.0 % in Ireland, Germany, France and Denmark. As such, the spillover received effect was relatively small in each of the three largest EU Member States. The spillover received effect accounted for one fifth to one quarter of export-supported value added in Poland, Czechia, Estonia, Romania, Austria, Croatia and Luxembourg, 27.2 % in Slovenia and 31.2 % in Slovakia.
Export-supported value added from the domestic and spillover received effects are shown in absolute values in Table 2. Such 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.
Clearly the largest level of export-supported value added resulting from the domestic effect was in Germany, where EUR 688.7 billion of value added was supported by Germany’s own exports, with the next largest domestic effects observed in France (EUR 336.1 billion) and Italy (EUR 271.6 billion).
The single largest spillover effect between any pair of countries was the EUR 9.0 billion of value added in the Netherlands in 2019 which was supported by German exports. Three other country pairings had spillover effects valued at more than EUR 8.0 billion: EUR 8.8 billion of value added in Germany was supported by French exports; EUR 8.5 billion of value added in Germany was supported by Dutch exports; EUR 8.3 billion of value added in France was supported by German exports.
Germany was by far the largest contributor of export-supported value added resulting from spillover effects: EUR 58.1 billion of value added in 2019 in EU Member States other than Germany was supported by German exports. As noted above, EUR 9.0 billion of this was in the Netherlands and EUR 8.3 billion in France, while Austria (EUR 5.9 billion), Poland (EUR 5.6 billion), Italy (EUR 4.0 billion) and Spain (EUR 3.9 billion) all had more than EUR 3.5 billion of value added supported by German exports. For comparison, the next highest contributors were Italy (EUR 37.2 billion of value added in other Member States), France (EUR 31.6 billion) and the Netherlands (EUR 27.2 billion). The high figure for the Netherlands may reflect, among other factors, the large distributive trades industry in the Netherlands and the fact that the port of Rotterdam — the largest maritime port within the EU in terms of the quantity of freight handled — is located in the Netherlands.
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Industries
Whereas Table 2 focused on value added in EU Member States that was supported by exports from themselves (domestic effect) or other Member States (spillover effect), Table 3 provides a similar analysis for industries. This presentation reveals the extent to which value added in specific industries is dependent on exports from the same industry or from other (downstream) industries. Unlike Table 2, Table 3 does not show absolute levels of value added, presenting instead shares. The shares in each column sum to 100.0 %: 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 export 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 2019, 86.7 % of all value added in the EU that was supported by exports from the education industry was in the education industry itself; the 20 other industries accounted for the remaining 13.3 % of value added supported by exports from the education industry, with the administrative and support service activities industry the largest beneficiary (2.0 %) of export-supported value added from industrial spillover effects.
By contrast, 53.8 % of the value added supported by exports from the construction industry was added in the same industry, the lowest share of any industry. Some 12.8 % of the value added supported by exports from the construction industry was added in manufacturing, 8.7 % in distributive trades and 6.4 % in professional, scientific and technical activities (which includes, among others, the activities of notaries, architectural and engineering services).
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Based on these percentage shares, the single largest industrial spillover effect between any pair of industries was the 12.8 % noted above for value added in manufacturing supported by exports from the construction industry. Three other industry pairings had industrial spillover effects where the shares were more than 8.0 % of value added supported by exports from a particular industry: 9.1 % of the value added supported by agriculture, forestry and fishing exports was in manufacturing; 9.0 % and 8.7 % of the value added supported by manufacturing and construction exports respectively were in distributive trades.
In absolute terms, the picture is somewhat different, as manufacturing exports alone supported EUR 1 626.6 billion of value added in the EU in 2019, equivalent to more than three fifths (62.9 %) of all export-supported value added in the EU; EUR 973.8 billion of this total was added within manufacturing itself, with the remaining EUR 652.8 billion representing the industrial spillover effect within the remaining 20 industries. The 10 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 was supported by manufacturing exports. For example, EUR 146.0 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 EUR 16.0 billion of value added in transportation and storage which was supported by exports from distributive trades.
Table 4 identifies for each of the EU Member States which two industries had the highest level of export-supported value added. In 21 of the Member States, manufacturing had the highest level of export-supported value added in 2019, while there were two more Member States where manufacturing had the second highest level. Greece, Cyprus, Luxembourg and Malta were the exceptions where manufacturing was not one of the two industries with the highest level of export-supported value added. The next most common industry was distributive trades, which had the highest level of export-supported value added in two Member States and the second highest in 15 more.
Five other industries appear in Table 4: transportation and storage in Estonia, Greece, Cyprus, Lithuania, Hungary and Portugal; financial and insurance activities in Cyprus, Luxembourg and Malta; information and communication in Ireland and Finland; professional, scientific and technical activities in Luxembourg and Malta; administrative and support service activities in France.
Earlier in this article it was noted that there are large industrial spillover effects from manufacturing exports, in the sense that a considerable level of value added in other industries is supported by exports from the manufacturing industry. Despite this large contributor effect, in most of the EU Member States — including the largest ones — manufacturing still had the highest 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 new 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 Kingdom, the United States and a selection of other non-EU countries which are the main EU trade partners (Argentina, Australia, Brazil, Canada, China, India, Indonesia, Japan, Mexico, Norway, Russia, Saudi Arabia, South Africa, South Korea, Switzerland and Turkey) 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 as much as possible to the OECD ‘Global regional TiVA initiative’ and to 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 the EU economies, the United Kingdom and the United States at a detailed level of 64 industries and 64 products, as defined in the ‘ESA 2010 National accounts transmission program’. The FIGARO data for the remaining EU partner countries come from the underlying data of the OECD TiVA database and cover 30 industries/products, in line with the OECD classification of 36 industries. The OECD-ICIO data used here were released in December 2018; their time series spans from 2010 to 2015 and Eurostat has made projections for the following years up to 2019. These estimates will be progressively replaced when new OECD TiVA and ICIO releases will become available.
Frequency and availability
Currently, the data in the FIGARO tables are available from 2010 to 2019 (period T–24 months, T being the year of release). As of 2021, they are produced annually by Eurostat.
The FIGARO tables will be updated on an annual basis with the latest available reference year (for example data for 2020 in 2022) and a more detailed breakdown of industries for the period T–48 months (for example data for 2018 in 2022). 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
The 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 in the EU. 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 position of the EU (or the euro area or individual EU Member States) in the world.
Notes
- ↑ The terms industry/industries are used in this article as synonyms for activity/activities, in the sense of the activities listed in the NACE classification.
- ↑ Leaving aside the small and somewhat atypical industry of activities of households as employers and undifferentiated goods- and services-producing activities of households for own use.
Direct access to
- Data can be accessed through the dedicated section as csv files and Rdata files.