Paola Monti () (Bank of Italy, Economic Research Department)
Abstract
This paper examines the product specialisation of Italian exports over the period 1985-2001 to identify the roots of ItalyÂ’s sluggish export performance with respect to world trade in the second half of the 1990s. In particular, the analysis focuses on the role of product specialisation in relation to world trade growth and competition from emerging countries. With regard to the first aspect, the paper finds that ItalyÂ’s export specialisation contributed to depressing total export growth because world demand for traditional and specialised suppliers products expanded at a slower pace in the 1990s than that for products in which Italy had a comparative disadvantage. With regard to the second aspect, confirming previous findings, the paper shows that only a small share of ItalyÂ’s exports in the 1990s competed directly with those of emerging countries, since on average they were of better quality. The analysis finds evidence of quality upgrading, a possible reaction to competitive pressures from low-cost goods exported by emerging countries that were able to exploit labour cost advantages in low-tech products. Quality upgrading has been an Italian as well as a European phenomenon, as data relative to the other three main euro-area countries indicate.
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Find related papers by JEL classification: F10 - International Economics - - Trade - - - General F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
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