Seminar: Functional Specialization in Trade

Regions specialize by carrying out particular activities within global production networks. We provide novel evidence on the value added of these functions to exports. Implementation is through harmonized data on occupations of workers across a large set of countries in combination with input-output tables. We find a positive (negative) correlation between GDP per capita and export specialization in R&D (fabrication) functions, but no correlation for management and marketing functions. Heterogeneity in specialization is large across countries at similar levels of income. We discuss potential for further study of functional specialization of (subnational) regions in the world economy.