Abstract:
The concept and logic of the “smile curve” in the context of global value chains has been widely used and discussed at the individual firm level, but rarely identified and investigated at the country and industry levels by using real data. This paper proposes an idea, based on an inter-country input-output model, to consistently measure both the strength  and  length  of  linkages  between  producers  and  consumers  along  global  value chains.  This  idea  allows  for  better  identification  and  mapping  of  smile  curves  for countries  and  industries  according  to  their  positions  and  degrees  of  participation  in  a given conceptual value chain. Using the 1995-2011 World Input-Output Tables, several conceptual  value  chains  are  investigated,  including  exports  of  electrical  and  optical equipment from China and Mexico and exports of automobiles from Japan and Germany.
The  identified  smile  curves  provide  a  very  intuitive  and  visual  image,  which  can significantly  improve  our  understanding  of  the  roles  played  by  different  countries  and industries  in  global  value  chains.  Further,  the  smile  curves  help  identify  the  benefits gained by these countries and industries through their participation in global trade.

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