Measuring International Production Fragmentation: Where Do We Stand?

Despite the growing importance of international fragmentation of production, it is still difficult to accurately assess its real size and effect. Several different indicators were proposed over the last decade, but their capacity to provide precise and consistent results is often hindered by the lack of proper data. From an academic and a political standpoint, gaining quantitative knowledge on international vertical fragmentation in production and trade is a major challenge, thus calling for robust and accurate measurement tools. As a first step to face this challenge, this paper takes stock of indicators proposed in the literature, highlighting their advantages and drawbacks and stressing the data requirements.