Vertical specialization across the world: evidence from the World Input-Output Table

Fragmentation of vertically integrated production processes (known also as vertical specialization) implies that production blocks are located in different countries and geographical areas across the world countries. This study extends the quantitative measure of vertical specialization, originally proposed by Hummels et al. (2001), into a multi-country framework. Based on this approach, vertical specialization in the world economy was studied between 1995 and 2011. Empirical evidence supports a significantincrease in the vertical specialization of the world economy during the study period.