Russia’s Global Value Chain using a Modified World Input-Output Data

In light of the growing intermediate goods trade, the WTO, the OECD, and the United Nations have emphasized the importance of a new concept of trade in value-added (TiVA) in place of traditional gross trade. Using this new concept, this study further develops theoretical and empirical research on Russia’s global trade network generated by value-added chains. First, based on global and local equilibrium conditions of a global input–output model, we prove the fundamental theorem on the relationship between gross trade balances in value-added and gross terms: the total sum of a country’s (country r) trade balances with many countries (countries 1, 2,…, s, …, R; s ≠ r) in value-added equals that in gross terms, namely, the total sum of differentials between country r’s trade balances with country s in value-added and gross terms equals zero: