Seeing the capital behind trade

Conventional Trade in Value Added (TiVA) indicators track value creation across countries but do not show where the capital used in production originates. This policy brief introduces a capital-endogenised framework that combines OECD Inter-Country Input-Output tables with new matrices of capital flows to trace the value added contributed by machinery, equipment, infrastructure, software, R&D and other physical and intangible assets across borders. The results reveal a deeper level of international integration than conventional measures suggest. Accounting for capital increases average OECD global value chain participation by around 11 percentage points and raises the measured services content of manufacturing exports by 9 percentage points. The framework also provides new insights into export specialisation and foreign capital exposure, highlighting hidden interdependencies in global production. These indicators can support policymaking in several areas, such as trade and investment policy, trade diversification, the design of resilience strategies, industrial policy and innovation support.