Territorial–Sectoral Heterogeneity in Global Value Added: Evidence from OECD TiVA Data, 1995–2022

This article examines whether global value added is better explained by territorial scale, sectoral specialization, time, or the configuration that emerges when specific sectors are embedded in specific economies. Using the OECD Trade in Value Added (TiVA) 2025 edition for 1995–2022, the study applies a hypothesis-guided and exploratory empirical design to a clean panel of individual economies and ISIC section sectors. The empirical strategy combines fixed-effect variance decomposition, transformation robustness, sectoral-share analysis, principal component analysis, cluster validation, concentration indicators, structural-change measures, and external robustness tests using World Bank WDI covariates. The economy–sector-plus-year model explains 90.4% of transformed value-added variance, compared with 69.5% in the additive economy–sector-year model. The first six principal components explain 64.7% of standardized sectoral-share variance, and the WDI-matched robustness panel retains 42,180 observations across 77 economies, 20 sectors, and 28 years. These results show that value-added heterogeneity is not reducible to economic size, development level, or time trends. The policy implication is that industrial, financial-resilience, and supply-chain strategies should be designed at the economy–sector level, rather than through generic country-wide or sector-wide instruments alone. The article contributes to global value-chain and structural-transformation research by showing that value-added heterogeneity is primarily territorial–sectoral: it arises from the way sectors are organized within particular economies.

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Publication Details

Journal
International Journal of Financial Studies
Published
2026-10-15
DOI
https://doi.org/10.3390/ijfs14100274
Primary Topic
Global trade and economics
Type
article
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article

Territorial–Sectoral Heterogeneity in Global Value Added: Evidence from OECD TiVA Data, 1995–2022

Alexis Raúl Garzón Paredes
International Journal of Financial Studies
Global trade and economics
article

Territorial–Sectoral Heterogeneity in Global Value Added: Evidence from OECD TiVA Data, 1995–2022

Alexis Raúl Garzón Paredes
article en

Abstract

This article examines whether global value added is better explained by territorial scale, sectoral specialization, time, or the configuration that emerges when specific sectors are embedded in specific economies. Using the OECD Trade in Value Added (TiVA) 2025 edition for 1995–2022, the study applies a hypothesis-guided and exploratory empirical design to a clean panel of individual economies and ISIC section sectors. The empirical strategy combines fixed-effect variance decomposition, transformation robustness, sectoral-share analysis, principal component analysis, cluster validation, concentration indicators, structural-change measures, and external robustness tests using World Bank WDI covariates. The economy–sector-plus-year model explains 90.4% of transformed value-added variance, compared with 69.5% in the additive economy–sector-year model. The first six principal components explain 64.7% of standardized sectoral-share variance, and the WDI-matched robustness panel retains 42,180 observations across 77 economies, 20 sectors, and 28 years. These results show that value-added heterogeneity is not reducible to economic size, development level, or time trends. The policy implication is that industrial, financial-resilience, and supply-chain strategies should be designed at the economy–sector level, rather than through generic country-wide or sector-wide instruments alone. The article contributes to global value-chain and structural-transformation research by showing that value-added heterogeneity is primarily territorial–sectoral: it arises from the way sectors are organized within particular economies.

International Journal of Financial StudiesVol. 14(10)
Universitat de València (ES), Universidad UTE (EC)
Industry, innovation and infrastructure, Decent work and economic growth
Openalex Percentile: Top 5%
Global trade and economics
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