The existence of multinational firms and the rise of global value chains raise the question how international trade contributes to a country's income. Ownership relations between, for example, headquarters and subsidiaries result in international income transfers. These transfers are ignored in standard trade data. Taking them into account in a global input-output analysis allows us to assess how much income is generated in one country due to the consumption of final products in another country. This provides a new perspective compared to the concept of value-added exports introduced by Johnson and Noguera (2012). For the US, we find that the income generated by foreign consumption is 51% higher than the value added in the US that is generated by foreign consumption. Similar findings hold for other countries as well, but to a lesser extent. The implication is that the current account deficit of the US almost disappears from the income perspective.

The “Final_matrices” excel file contains research output related to the paper “From exports to value added to income: Accounting for bilateral income transfers”. Details on how the data are assembled can be found in the paper and in its online appendix. Replication files (R-files and Matlab-codes) as well as the raw data needed for replication of all empirical results in the paper are available upon request from the author.