Advanced Search
MyIDEAS: Login to save this paper or follow this series

Market Positioning of Varieties in World Trade: is Latin America Losing Out on Asia?

Contents:

Author Info

  • Nanno Mulder
  • Rodrigo Paiilacar
  • Soledad Zignago

Abstract

There is increasing empirical evidence that trade specialisation and competition takes place in varieties rather than in products or industries. This paper examines recent changes in the export specialisation of Latin America and the Caribbean (LAC) and their Asian competitors by looking at their vertical specialisation through prices. Three price (or quality) segments are distinguished to compare export performance between the two regions using our BACI database, which provides harmonised bilateral unit values for most countries in the world at the most disaggregated product-level (5,000 products) for the period 1995 to 2004. The technology-content of products is also taken into account. The evidence suggests that LAC is losing out on China which is gaining large market shares, notably in the low-quality segment and low-tech segment. However, LAC has retained its initial overall market share, by slightly upgrading the quality and technology content of its exports. Our estimates of similarities in export structures confirm that varieties exported by the two continents are very different. Moreover, LAC export prices are much higher than those of China, but relatively similar to the ones of other Asian nations. Finally, we analyse the determinants of unit values of Latin American and Asian exports. Econometric tests confirm that the type of global competition differs between the two regions: prices play a bigger role in the case of Asian exports, whereas Latin America competes more on quality in world markets.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cepii.fr/PDF_PUB/wp/2009/wp2009-09.pdf
Download Restriction: no

Bibliographic Info

Paper provided by CEPII research center in its series Working Papers with number 2009-09.

as in new window
Length:
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:cii:cepidt:2009-09

Contact details of provider:
Postal: 113, rue de Grenelle, 75700 Paris SP07
Phone: 33 01 53 68 55 00
Fax: 33 01 53 68 55 01
Web page: http://www.cepii.fr
More information through EDIRC

Related research

Keywords: Export unit values; vertical differentiation; Latin America; Asia;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Olivier Cadot & Céline Carrere & Vanessa Strauss-Khan, 2011. "Export Diversification: What's behind the Hump?," Working Papers, HAL halshs-00553597, HAL.
  2. E. Baldwin, Richard & Ito, Tadashi, 2011. "Quality Competition Versus Price Competition Goods: An Empirical Classification," Journal of Economic Integration, Center for Economic Integration, Sejong University, Center for Economic Integration, Sejong University, vol. 26, pages 110-135.
  3. Eduardo Lora, 2005. "Should Latin America Fear China?," Research Department Publications, Inter-American Development Bank, Research Department 4419, Inter-American Development Bank, Research Department.
  4. Robert C. Feenstra & James R. Markusen & Andrew K. Rose, 2001. "Using the gravity equation to differentiate among alternative theories of trade," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 34(2), pages 430-447, May.
  5. Mauricio Mesquita Moreira, 2004. "Fear of China: Is there a future for manufacturing in Latin America?," Development and Comp Systems 0412008, EconWPA.
  6. Rodrik, Dani, 2006. "What's So Special about China's Exports?," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp06-001, Harvard University, John F. Kennedy School of Government.
  7. Lu, Chia-Hui, 2007. "Moving up or moving out? A unified theory of R&D, FDI, and trade," Journal of International Economics, Elsevier, Elsevier, vol. 71(2), pages 324-343, April.
  8. Raphael Kaplinsky & Amelia Santos Paulino, 2005. "Innovation and Competitiveness: Trends in Unit Prices in Global Trade," Oxford Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 33(3-4), pages 333-355.
  9. Hausmann, Ricardo & Hwang, Jason & Rodrik, Dani, 2006. "What You Export Matters," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5444, C.E.P.R. Discussion Papers.
  10. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, Elsevier, vol. 48(1), pages 7-35, June.
  11. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
  12. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
  13. David Hummels & Alexandre Skiba, 2004. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 112(6), pages 1384-1402, December.
  14. Lionel Fontagné & Rodrigo Paillacar, 2007. "China is Shipping more Products to the United States than Germany," La Lettre du CEPII, CEPII research center, CEPII research center, issue 270.
  15. Gordon H. Hanson & Raymond Robertson, 2008. "China and the Manufacturing Exports of Other Developing Countries," NBER Working Papers 14497, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
  2. Enestor Dos Santos & Soledad Zignago, 2010. "The impact of the emergence of China on Brazilian international trade," Working Papers, BBVA Bank, Economic Research Department 1022, BBVA Bank, Economic Research Department.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cii:cepidt:2009-09. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.