Intra-Industry Trade and the Single Market: Quality Matters
AbstractAnalysing data on values and unit values of bilateral trade flows at a very detailed level (some 10,000 product items), we examine the nature of intra-EC trade over the period 1980-94, identify its general determinants and then estimate the specific impact of the Single European Market programme. Trade patterns are identified by breaking up total trade into three trade types: one-way (i.e. inter-'industry') trade, two-way (i.e. intra-'industry') trade in horizontally differentiated products, and two-way trade in vertically differentiated products. One of the main findings is that the observed increase in intra-'industry' trade in Europe is almost entirely due to two-way trade in vertical differentiation: thus, the 1980-94 period is characterized by a increasing specialization of countries along ranges of qualities within products, suggesting a 'qualitatively' division of labour in Europe. General determinants as well as direct and indirect effects of the single market in this evolution are assessed with an econometric model integrating country, industry and integration variables. We conclude that the first years of the Single market have neither validated the optimistic scenario entailed in ex-ante studies, nor led to a more pronounced inter-industry specialization of European members potentially associated with cohesion costs. Adjustments have taken place within industries, on the quality spectrum.
Download InfoIf 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.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1959.
Date of creation: Sep 1998
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
- F1 - International Economics - - Trade
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Lionel Fontagné & Guillaume Gaulier & Soledad Zignago, 2007.
"Specialisation across Varieties within Products and North-South Competition,"
2007-06, CEPII research center.
- Lionel Fontagné & Guillaume Gaulier & Soledad Zignago, 2008. "Specialization across varieties and North-South competition," Economic Policy, CEPR & CES & MSH, vol. 23, pages 51-91, 01.
- PICARD, Pierre M. & OKUBO, Toshihiro, .
"Firms' locations under demand heterogeneity,"
CORE Discussion Papers RP
-2459, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Pekka Mäkelä & Reino Hjerppe & Iikko Voipio, 1998. "Finland as a Member of European Union - First Experiences," Discussion Papers 180, Government Institute for Economic Research Finland (VATT).
- José Luis Moraga Gonzales & Jean-Marie Viaene, 2001.
"Procompetitive Trade Policies,"
CESifo Working Paper Series
597, CESifo Group Munich.
- Manasse, Paolo & Stanca, Luca & Turrini, Alessandro Antonio, 2002.
"Wage Premia and Skill Upgrading in Italy: Why Didn't the Hound Bark?,"
CEPR Discussion Papers
3202, C.E.P.R. Discussion Papers.
- Manasse, Paolo & Stanca, Luca & Turrini, Alessandro, 2004. "Wage premia and skill upgrading in Italy: why didn't the hound bark?," Labour Economics, Elsevier, vol. 11(1), pages 59-83, February.
- Paolo Manasse & Luca Stanca & Alessandro Turrini, . "Wage Premia and Skill Upgrading in Italy: Why didn’t the Hound Bark?," Working Papers 204, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Paolo Manasse & Luca Stanca & Alessandro Turrini, 2002. "Wage Premia and Skill Upgrading in Italy: Why Didn´t the Hound Bark?," Development Working Papers 162, Centro Studi Luca d\'Agliano, University of Milano.
- Paolo Manasse & Luca Stanca & Alessandro Turrini, 2001. "Wage Premia and Skill Upgrading in Italy: Why didn’t the Hound Bark?," Working Papers 37, University of Milano-Bicocca, Department of Economics, revised Nov 2001.
- P. Manasse & L. Stanca & A. Turrini, 2001. "Wage Premia and Skill Upgrading in Italy: Why didn't the Hound Bark?," Working Papers 423, Dipartimento Scienze Economiche, Universita' di Bologna.
- AZHAR, Abdul K.M. & Elliott, Robert J.R. & Liu, Junting, 2008. "On the measurement of product quality in intra-industry trade: An empirical test for China," China Economic Review, Elsevier, vol. 19(2), pages 336-344, June.
- Bowdler, Christopher & Jansen, Eilev S., 2004. "A markup model of inflation for the euro area," Working Paper Series 0306, European Central Bank.
- Sébastien Dupuch & Hugues Jennequin & El Mouhoub Mouhoud, 2004. "EU enlargement: what does it change for the European economic geography?," Revue de l'OFCE, Presses de Sciences-Po, vol. 91(5), pages 241-274.
- Giuseppe Celi & Alasdair Smith, 1999. "Quality Differentiation and the Labour Market Effects of International Trade," CELPE Discussion Papers 50, CELPE (Centre of Labour Economics and Economic Policy), University of Salerno, Italy.
- Petit, Pascal, 2003. "Mondialisation et régionalisation," CEPREMAP Working Papers (Couverture Orange) 0313, CEPREMAP.
- Anna Maria Ferragina, 2000. "Price versus quality competition in Italys trade with central and eastern Europe aver the transition," Departmental Working Papers of Economics - University 'Roma Tre' 0015, Department of Economics - University Roma Tre.
- Giuseppe Celi, 2004. "Quality Differentiation, Vertical Disintegration and The Labour Market Effects of Intra-Industry Trade," CELPE Discussion Papers 86, CELPE (Centre of Labour Economics and Economic Policy), University of Salerno, Italy.
- Thannaletchimy Thanagopal, 2011. "Estimating import price elasticity while controlling for quality," Post-Print dumas-00643757, HAL.
- Elisabeth Kutschka, 2011. "Quality Upgrading, Skill Demand and International Trade: The Case of German Manufacturing," FEMM Working Papers 110022, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.