Analysis of Country Economic Growth Based on Industries Chain Position

Round 1

Reviewer 1 Report

Referee report on "Analysis of country economic growth based on industries chain position"

 The authors study an interesting topic. The paper is nice and informative and the results are intuitive. It is written in a plain language, which is easy to follow. My comments are relatively minor.

 1. You start from 1995. Justify this decision somehow.

2. On page 5 (lines 196 – 197) you write “The world economy has experienced rapid expansion since 1995.”Provide some figures to justify this claim. It may be shown in a graph.

3. Line 221: Start talking about China in a new paragraph.

And, more importantly,

3a. As China is a main focus of your study, add a special Section to discuss the changes in China’s trade policy that occurred in the 1990s in the anticipation and in the process of the country’s inclusion in the WTO. An important feature of this period was a reduction in the tariffs in China that contributed to an increase in foreign trade, which, in turn, helped to accelerate the country’s economic growth. Add a couple of citations to the studies that show it, or any supporting data reported by the Chinese CSB. Add that, in general, a reduction in tariffs may be beneficial for developing economies, since it may increase their incentive to develop sectors with higher growth potential (Azarnert, 2014). As you repeatedly compare the experience of China to that of Vietnam, you also can add a short discussion of the changes in trade policies of Vietnam too.

4. When you discuss the innovation-driven development strategy (lines 394 – 411), to better connect the paper to the general economic context, to line 411 on, you can add the following statement:

“Moreover, it will also enhance the general demand for human capital, which is broadly shown to be a key factor in modern economic growth (Galor and Mountford (2008), Azarnert, 2014).”

 References

Galor, O, Mountford, A. (2008) Trading population for productivity: Theory and evidence. Review of Economic Studies 75, 1143–1179

Azarnert, L.V. (2014) Agricultural exports, tariffs and growth. Open Economies Review 25, 797–807

Azarnert, L.V. (2016) Transportation costs and the Great Divergence. Macroeconomic Dynamics 20, 214–228

Author Response

Dear reviewer,   We sincerely thank you for your valuable feedback that we have used to improve the quality of our manuscript. Your comments and suggestions have been modified one by one and are highlighted with yellow. And we have benefited a lot from the references you gave us. Please see the attachment. We are very grateful for your hard work and support.    With kind regards,
Yours sincerely,
Chao Wang

Author Response File: Author Response.pdf

Reviewer 2 Report

Analysis of Country Economic Growth Based on Industries Chain Position 

Abstract

The abstract lacks specificity in describing the methodology used for clustering and analyzing national development models, making it difficult to evaluate the rigor of the research. Additionally, the conclusion drawn about economic development following only two trajectories oversimplifies the complex dynamics of international trade, potentially overselling the paper's findings.

Introduction

The introduction is overly verbose and lacks focus, with many definitions and explanations that could be clarified. The text meanders through various concepts related to GDP components, globalization, and trade, making it challenging for the reader to discern the paper's core objectives and contributions.

The Decomposition of Production Chains

The methodology section is excessively complex, and the presented equations and notations lack clarity and concise explanation, making it difficult for the reader to understand the calculations and their significance. The use of numerous subscripts and matrix notation without sufficient explanation may hinder the reproducibility of the research.

The Current State of International Trade

The text lacks a clear and concise presentation of the findings and their implications, making it difficult for the reader to grasp the significance of the observed trends. Additionally, while the figures presented provide some insight, the explanation of the results and their impact on the countries is limited, leaving the reader with unanswered questions about the implications of these clusters on global trade dynamics.

How Trade Mode Effects Economy Growth

The presentation of the findings in this section is somewhat disjointed and lacks clarity in explaining the implications of the observed trends on the relationship between trade ability (TA) and GDP growth. While the figures and charts provide some insight, the narrative could benefit from a more cohesive and focused discussion to help readers better understand the findings and their significance regarding different countries' economic development modes.

Conclusion

The concluding section provides insightful policy recommendations, but it should be more concise and focused on summarizing the study's key findings and main takeaways. The extensive and detailed policy recommendations could be condensed for clarity, enhancing the readability of the paper's conclusion.

Moderate editing of English language required.

Author Response

Dear reviewer,  

We sincerely thank you for your valuable feedback that we have used to improve the quality of our manuscript. We have modified the following point by point based on your comments and suggestions.

Comments 1:

Abstract: The abstract lacks specificity in describing the methodology used for clustering and analyzing national development models, making it difficult to evaluate the rigor of the research. Additionally, the conclusion drawn about economic development following only two trajectories oversimplifies the complex dynamics of international trade, potentially overselling the paper's findings.

Response 1:

Thank you for pointing this out. We agree with this comment. The abstract of the manuscript is now modified to the following statement.

“In contrast to the past, the trade behavior of countries has become increasingly intricate, encompassing domestic trade rooted in local markets, traditional trade centered on final exports, and value chain trade reliant on intermediate goods. Tailoring their strategies to their unique circumstances, nations judiciously allocate their economic focal points across these three trade modalities, thereby engendering distinct national development models. By discerning the varying emphases placed by countries on these three trade modes, this paper employs clustering techniques to extract and analyze divergent national development models. Additionally, this paper assesses countries' performance in various trade activities and introduces a new indicator, Total Trade Ability (TTA), to examine the impact of these models on the economy. With our approach, one can easily distinguish the how different kinds countries develop their economy. Our findings indicate a strong correlation between economic growth and TTA. In general, countries with higher TTA tend to exhibit higher economic growth.”

Comments 2:

Introduction: The introduction is overly verbose and lacks focus, with many definitions and explanations that could be clarified. The text meanders through various concepts related to GDP components, globalization, and trade, making it challenging for the reader to discern the paper's core objectives and contributions.

Response 2:

Thank you for pointing this out. We agree with this comment. We condensed the introduction of the manuscript and pointed out the core objectives and contributions. The changes to the section “Introduction” can be found on pages 1-2, lines 24-94 of the revised manuscript.

Comments 3:

The Decomposition of Production Chains: The methodology section is excessively complex, and the presented equations and notations lack clarity and concise explanation, making it difficult for the reader to understand the calculations and their significance. The use of numerous subscripts and matrix notation without sufficient explanation may hinder the reproducibility of the research.

Response 3:

Thank you for pointing this out. We agree with this comment. Since the methods used are mathematically complex, we have presented the calculation formulas and methods as simply as possible. In addition, we have added an explanation of the meaning of the equations and notations. Some modifications are as follows:

“We ended up with data from 67 economies, each consisting of 45 sectors.”

“Where X represents the total output (size: 3015*1), Z is a matrix of intermediate input flows produced between each industry of each country. Y stands for final demand, A represents the input-output coefficient matrix (denoted as A=Z/X), and A^D refers to the domestic consumption coefficient matrix, which is a diagonal block part of A, A^F=A-A^D.” etc.

Comments 4:

The Current State of International Trade: The text lacks a clear and concise presentation of the findings and their implications, making it difficult for the reader to grasp the significance of the observed trends. Additionally, while the figures presented provide some insight, the explanation of the results and their impact on the countries is limited, leaving the reader with unanswered questions about the implications of these clusters on global trade dynamics.

Response 4:

Thank you for pointing this out. We agree with this comment. The changes to the section “The Current State of International Trade” can be found on page 7, lines 237-243 and page 9, lines 269-285 of the revised manuscript.

Comments 5:

How Trade Mode Effects Economy Growth: The presentation of the findings in this section is somewhat disjointed and lacks clarity in explaining the implications of the observed trends on the relationship between trade ability (TA) and GDP growth. While the figures and charts provide some insight, the narrative could benefit from a more cohesive and focused discussion to help readers better understand the findings and their significance regarding different countries' economic development modes.

Response 5:

Thank you for pointing this out. We agree with this comment. We re-explain the relationship between TTA (The total ability) and GDP growth. The changes to the section “How Trade Mode Effects Economy Growth” can be found on pages 12-13, lines 365-397 of the revised manuscript.

Comments 6:

Conclusion: The concluding section provides insightful policy recommendations, but it should be more concise and focused on summarizing the study's key findings and main takeaways. The extensive and detailed policy recommendations could be condensed for clarity, enhancing the readability of the paper's conclusion.

Response 6:

Thank you for pointing this out. We agree with this comment. We summarize the study's key findings and main takeaways of this manuscript and condense and revise the policy recommendations. The changes to the section “Conclusion” can be found on pages 13-14, lines 399-448 of the revised manuscript.

Your comments and suggestions have been modified point-by-point, and the main changes are highlighted with yellow in the revised manuscript. Please see the attachment. In addition, the revised manuscript has undergone moderate English editing.

If other modifications are needed, we can make corresponding modifications based on your subsequent comments. If you have other references that you recommend us to cite, we can also read them carefully and cite them appropriately.

We are very grateful for your hard work and support.  

With kind regards,
Yours sincerely,
Chao Wang

Author Response File: Author Response.pdf

Reviewer 3 Report

This study has analyzed the economic growth of country based on industries chain position. The topic is interesting. However, there are many issues that are need to be addressed in order to make the paper more presentable and ready for publication.

·           In the abstract, authors should clearly emphasize which methodology they have proposed and which it is new in comparison to previous one.

·           Authors are recommended to clearly state the implications of their study in one or two lines at the end of the abstract.

·           In the introduction section, authors have explained how existing studies have explored different perspectives related to the globalization of economy and production. However, the authors did not explain what are the research gaps that have pushed them to do their current study?

·           Also, the motivations and the contributions are not clearly presented in their study. Thus, I recommend them to do so.

·           Authors have stated that their data are from 2021 release of the OECD. I suggested them to provide a specific reference such as report or document for checking.

·           What is the novelty of your methodology and in which it is different with previous methods for the specific topic under consideration.

·           Please, give as flowchart the methodology framework of your study.

·           Figure 6 need to have high resolution since it is not very clear. Please, check also other figures within your manuscript.

·           I suggested authors to have a separate section for discussion of their findings.

·           What are the managerial and theorical implications of your study. It should be discussed as section before conclusion.

·           The conclusion is lengthy. I suggested authors to just give some necessary findings from their study. I recommend to remove bullets and make it as two or three paragraphs.

·           Please, give the limitation of your study along with future recommendations

moderate editing of englsih is required

Author Response

Dear reviewer,  

We sincerely thank you for your valuable feedback that we have used to improve the quality of our manuscript. We have modified the following point by point based on your comments and suggestions.

Comments 1:

In the abstract, authors should clearly emphasize which methodology they have proposed and which it is new in comparison to previous one. Authors are recommended to clearly state the implications of their study in one or two lines at the end of the abstract.

Response 1:

Thank you for pointing this out. We agree with this comment. The abstract of the manuscript is now modified to the following statement.

“In contrast to the past, the trade behavior of countries has become increasingly intricate, encompassing domestic trade rooted in local markets, traditional trade centered on final exports, and value chain trade reliant on intermediate goods. Tailoring their strategies to their unique circumstances, nations judiciously allocate their economic focal points across these three trade modalities, thereby engendering distinct national development models. By discerning the varying emphases placed by countries on these three trade modes, this paper employs clustering techniques to extract and analyze divergent national development models. Additionally, this paper assesses countries' performance in various trade activities and introduces a new indicator, Total Trade Ability (TTA), to examine the impact of these models on the economy. With our approach, one can easily distinguish the how different kinds countries develop their economy. Our findings indicate a strong correlation between economic growth and TTA. In general, countries with higher TTA tend to exhibit higher economic growth.”

Comments 2:

In the introduction section, authors have explained how existing studies have explored different perspectives related to the globalization of economy and production. However, the authors did not explain what are the research gaps that have pushed them to do their current study? Also, the motivations and the contributions are not clearly presented in their study. Thus, I recommend them to do so.

Response 2:

Thank you for pointing this out. We agree with this comment. In the introduction section, we added our research motivations and contributions, and condensed and revised the introduction. Some modifications are as follows.

“In previous papers, the focus was primarily on theoretical analysis or the construction of descriptive indicators related to traditional trade, often mixing all trade activities together. There has been relatively less discussion about economic growth based on the subdivision of economic activities, such as domestic trade, traditional trade, and intermediate trade.

In this paper, we decompose the GDP and economy activities into distinct segments, allowing us to ascertain the contribution of each component (domestic consumption, traditional trade, intermediate trade) to the overall GDP. Based on the above-mentioned information, this paper categorizes the development models of various countries and elaborates on their distinct characteristics and distribution patterns. Simultaneously, we analyze the country's performance in different trade activities and construct a new indicator (TTA), which examines the driving influence of these models on the economy. We compare the evolving trends of TTA and GDP for various development modes over time, establishing a strong relationship between GDP growth and TTA. Finally, we provide recommendations for the future development of countries amidst a tumultuous international environment.”

Comments 3:

Authors have stated that their data are from 2021 release of the OECD. I suggested them to provide a specific reference such as report or document for checking.

Response 3:

Thank you for pointing this out. We agree with this comment. The data in this manuscript can be obtained from the OECD website (https://data.oecd.org/searchresults/?q=input+output). At the same time, we can also package the original data in the manuscript and send it to the editor upon request.

Comments 4:

What is the novelty of your methodology and in which it is different with previous methods for the specific topic under consideration.

Response 4:

Thank you for pointing this out. The novelty of this paper's methodology has been stated in the Abstract and Introduction. The framework of our paper is described below.

“Section 2 provides a formal definition of the total production length measure and outlines how it can be decomposed into domestic and GVC production length using the production activity account framework proposed by Wang et al. [24]. Section 3 analyses the economy development of both the global economy and individual countries, identifying evolving trends and categorizing countries into different developmental paths. Section 4 employs the production length to determine a country's position in the global context. It defines a country's trade ability in the world and analyzes how these trade ability changes in relation to economic growth. Additionally, it compares how different modes affect both of these factors. Section 5 serves as the conclusions of the paper, offering constructive suggestions for countries to prioritize their economic development efforts.”

Comments 5:

Figure 6 need to have high resolution since it is not very clear. Please, check also other figures within your manuscript.

Response 5:

Thank you for pointing this out. We agree with this comment. We have redrawn Figure 6 and improved the resolution of all figures in the manuscript as much as possible.

Comments 6:

I suggested authors to have a separate section for discussion of their findings. What are the managerial and theoretical implications of your study. It should be discussed as section before conclusion. The conclusion is lengthy. I suggested authors to just give some necessary findings from their study. I recommend to remove bullets and make it as two or three paragraphs. Please, give the limitation of your study along with future recommendations.

Response 6:

Thank you for pointing this out. We agree with this comment. The changes to the Conclusions can be found on pages 13-14, lines 398-458 of the revised manuscript.

Your comments and suggestions have been modified point-by-point and are highlighted with yellow in the revised manuscript. Please see the attachment. In addition, the revised manuscript has undergone moderate English editing.

If other modifications are needed, we will complete it based on your follow-up comments. If you have other reference recommendations, we can also read them carefully and cite them.

We are very grateful for your hard work and support.  

With kind regards,
Yours sincerely,
Chao Wang

Author Response File: Author Response.pdf

Round 2

Reviewer 2 Report

The authors have adressed the comments. 

 Minor editing of English language required

Reviewer 3 Report

The authors have significantly improved the manuscript and have responded to all my suggestions. Thereby, I recommend the paper to be accepted for publication.

Minor editing of English is required