Value Added Analysis

A Value Added Analysis is an economic analysis method that measures economic contributions at each production stage to assess productive efficiency and economic linkages.

• AKA: Value Addition Analysis, VA Analysis, Value Chain Analysis, Production Stage Analysis.
• Context:
  • It can typically decompose Total Product Value into stage-specific contributions.
  • It can typically identify Value Creation Points across supply chains.
  • It can typically assess Backward Linkages and forward linkages.
  • It can typically support Industrial Policy Decisions through sectoral analysis.
  • It can typically reveal Competitive Advantage Sources in production networks.
  • ...
  • It can often expose Value Capture Patterns across industry participants.
  • It can often inform Upgrading Strategies for developing economies.
  • It can often measure Import Dependency at different production stages.
  • It can often evaluate Trade Policy Impact on domestic value creation.
  • ...
  • It can range from being a Simple Value Added Analysis to being a Complex Value Added Analysis, depending on its sectoral coverage.
  • It can range from being a Static Value Added Analysis to being a Dynamic Value Added Analysis, depending on its temporal dimension.
  • ...
  • It can calculate Gross Value Added by industry sector.
  • It can measure Domestic Content Ratio in export products.
  • It can trace Value Chain Position of economic actors.
  • It can estimate Effective Protection Rate for policy evaluation.
  • It can identify Value Chain Bottlenecks for intervention targeting.
  • ...
• Example(s):
  • Sectoral Value Added Analysis, such as:
    • Manufacturing Value Added Analysis for industrial performance.
    • Services Value Added Analysis for tertiary sector contribution.
    • Agricultural Value Added Analysis for rural development.
  • Trade-Based Value Added Analysis, such as:
    • Trade in Value Added Analysis for global value chains.
    • Export Value Added Analysis for competitiveness assessment.
    • Import Content Analysis for dependency evaluation.
  • Firm-Level Value Added Analysis, such as:
    • Company Value Chain Analysis for strategic positioning.
    • Supplier Value Analysis for procurement decisions.
    • Product Value Analysis for pricing strategy.
  • Policy-Oriented Value Added Analysis, such as:
    • Effective Protection Analysis for tariff impact.
    • Local Content Analysis for industrial policy.
  • ...
• Counter-Example(s):
  • Gross Output Analysis, which counts total production without removing intermediate inputs.
  • Market Share Analysis, which measures competitive position rather than value creation.
  • Cost-Benefit Analysis, which evaluates project viability rather than production structure.
• See: Economic Analysis Method, Input-Output Analysis, Global Value Chain Analysis, Production Network Analysis, Industrial Linkage Study, Economic Contribution Assessment, Supply Chain Mapping.

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