Export performance, competitiveness and commodity composition

Athanasoglou, Panayiotis and Backinezos, Constantina and Georgiou, Evangelia (2010): Export performance, competitiveness and commodity composition. Published in: RePEc No. Working Paper 114 (May 2010)

Abstract

The study of export performance, especially for countries with serious external imbalances, is essential for economic decision-making. This study attempts to evaluate Greek export performance during the 1996-2001 period, using detailed panel data on bilateral trade by product. Factors explaining Greek export market shares are analysed with the method of Constant Market Shares. In addition, the dynamics of the specialization pattern of Greek exports and the effect of price competitiveness on export market shares are examined. The results show a considerable change in export structure, mainly the geographical structure, with a favourable effect on market shares. Although the pattern of comparative advantages and the technological intensity of Greek exports have improved, exports remain concentrated in low- and medium-technology sectors, while product variety and quality have declined. Finally, the results show heterogeneity among the panels. In the aggregate, export market shares are inelastic with respect to relative and absolute prices, which would call for focus on non-price factors to improve competitiveness in international markets. However, elasticities are greater than one for a considerable proportion of commodities.

• Item Type: MPRA Paper
• Language: English
• Keywords: export performance; market shares; New Trade Theory; comparative advantages; Markov matrix; price and non-price competitiveness
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology

References

Anderton, R. (1999), “UK trade performance and the role of product quality, variety, innovation and hysteresis: some preliminary results”, Scottish Journal of Political Economy, 46, 553-570, November.

Athanasoglou, P. (1993), “The determinants of Greek export performance”, Bank of Greece, unpublished manuscript (in Greek).

Athanasoglou, P. and I. Bardaka (2010), ‘‘New trade theory, non-price com-petitiveness and export perfornance’’, Economic Modelling, 27, 217-228.

Αmador, J., S. Cabral and J. Ramos Maria (2007), “International trade patterns over the last four decades: How does Portugal compare with other cohesion countries?”, Banco de Portugal Working papers, 14, September.

Anderson, T.W. and L.A. Goodman (1957), “Statistical inference about Markov chains”, Annals of Mathematical Statistics, XXVIII.

Aquino, A. (1978), “Intra-industry trade and inter-industry specialization as concurrent sources of international trade in manufactures”, Weltwirtschaftliches Archiv, 114, 275-296.

Αrellano, M. and O. Bover (1995), “Another look at the instrumental variable estimation of error-components models”, Journal of Econometrics, 68, 29-51.

Balassa, B. (1965), “Trade liberalization and “revealed comparative advantages”, The Manchester School of Economics and Social Studies, 32, 2, 99-123.

Balassa, B. (1985), “Exports policy choices and economic growth in developing countries after the 1973 oil shock”, Journal of Development Economics, May/June, 23-35.

Blundell, R. and S. Bond (1998), “Initial conditions and moment restrictions in dynamic panel-data models”, Journal of Econometrics, 87, 115-143.

De Benedictis, L. and M. Tamberi (2001), “A note on the Balassa Index of revealed comparative advantage”, available at SSRN: http://ssrn.com/abstract=289602.

Dixit, A.K. and V. Norman (1980), Theory of International Trade, Cambridge University Press, Cambridge, UK.

Di Mauro, F. and Κ. Forster (2008), Globalization and the competitiveness of the Euro area, European Central Bank, Occasional Paper 97.

Dollar, D. (1992), “Outward-orientated developing countries really do grow more rapidly: Evidence from 95 LDC’s, 1976-85”, Economic Development and Cultural Change, 40, April, 523-544.

Edwars, S. (1992), “Trade orientation, distortions and growth in developing countries”, Journal of Development Economics, 39, 31-57.

European Central Bank (2006), “Competitiveness and the export performance of the Euro area”, Monthly Bulletin, July.

Εuropean Central Bank (2005), “Euro area export performance and price competitiveness”, Occasional Paper 30, June.

Feenstra, R.C. (1994) "New commodity varieties and the measurement of international prices," American Economic Review, American Economic Association, 84, 1, 157-177.

Fontagne and Freudenberg (2002), “Long-term trends in intra-industry trade” in Lloyd P.J. and H. Lee (2002), Frontiers of research on intra-industry trade, Palgrave.

Funke, M. and R. Ruhwedel (2001), “Commodity variety and economic growth: Empirical evidence for the OECD countries”, IMF Staff Papers, 48, 2, 225-242.

Funke, M. and R. Ruhwedel (2001), “Export variety and export performance: empirical evidence from East Asia”, Journal of Asian Economics, 12, 493-505.

Grubel, H. and P. Lloyd (1975), Intra-Industry Trade, John Wiley, New York.

Grossman, G. and E. Helpman (1991), “Innovation and growth in the global economy”, MIT Press, Cambridge, MA.

Hummels, D. and P. Klenow (2002), “The variety and quality of a nation’s trade”, Working paper 8712, National Bureau of Economic Research.

International Monetary Fund (2008), “Competitiveness in the Southeastern Euro Area: France, Greece, Italy, Portugal and Spain”, Working paper 112.

Κandogan, Y. (2003), “Does commodity differentiation explain the increase in exports of transition countries?”, William Davidson Institute, Working Paper 599, July.

Κrugman, P. (1989), “Differences in income elasticities and trends in real exchange rates”, European Economic Review, 33, 1031-1054.

Μichel, B. (2005), Trends in export market shares between 1991-2001, Working paper 7-05, Federal Planning Bureau, Brussels.

Muscatelli, V. A., A. A. Stevenson and C. Montagna (1995), “Modelling aggregate manufactured exports for some Asian newly industrialized economies”, The Review of Economics and Statistics, MIT Press, 77, 1, 147-155.

Papazoglou, C. (2009), “Is Greek export performance indeed low?”, Economic Bulletin 32, Bank of Greece.

Richardson, J. (1971), “Constant-market-shares analysis of export growth”, Journal of International Economics, 1, 2, 227–39.

Sachs, J. and A. Warner (1995), “Economic reform and the process of global integration”, Brookings Papers on Economic Activity.

Schott, P. (2004), “Across-commodity versus within-commodity specialization in international trade, Quarterly Journal of Economics, 119, 2, 647-678.

Swamy, P. (1970), “Efficient inference in a random coefficient regression model”, Econometrica, 38, 311-323.