Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/201371
Authors: 
Ali-Yrkkö, Jyrki
Kuusi, Tero
Year of Publication: 
2019
Series/Report no.: 
ETLA Report 89
Abstract: 
In this study, we analyze the trade linkages between the United Kingdom (UK), Finland, and the European Union (EU). We calculate the value-added content of trade through complex global value chains (GVCs), which may involve numerous production stages and third countries. Our results show that the importance of the UK as a trading partner for Finland has decreased during the last 15 years, and the tendency has been stronger than that between the UK and other EU countries, on average. We compare the importance of the UK to that of other countries by extracting the total amount of the Finnish value added that is generated in the value chains involving individual countries. Through this comparison, we find that the UK ranks as the sixth most important country. We further decompose the total value added into components that quantify the value added that is generated through direct trade with the UK and the indirect trade that is channeled through third countries. We find that roughly one third of the total value added is generated through indirect trade and two thirds through direct trade. Our analysis also suggests that one fifth of both the Finnish and EU value-added trade to the UK passes through the UK to other countries. The main destination countries are the United States (US), Germany, and France.
Subjects: 
Global value chain
Brexit
United Kingdom
Gross domestic product
Impact
Indirect
Route
Value added
JEL: 
F13
F14
F23
L23
Document Type: 
Research Report

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