We use the World Input-Output Database and build on Wang et al. (2013) gross exports decomposition to analyze the bilateral trade relation between Mexico and the United States from a value added perspective. Once we take into account that gross commercial flows are clouded by failing to account...

We show that traditional gravity variables play a significant role in explaining trade flows related to global value chain participation. We find evidence that cooperation costs - measured by linguistic and geographical proximity - are more relevant for trade that reflects cross-border...