Foreign Market Conditions and Export Performance: Does 'Crowdedness' Reduce Exports?
Abstract
This paper analyzes the link between firm exports and the competitive environment in foreign markets. We derive a theory-based econometric specification linking destination-specific exports to foreign demand and the degree of 'crowdedness' of foreign markets. The latter is a measure of the number and efficiency of firms competing in a given market and the barriers impeding their access. We estimate this specification on a large sample of Italian manufacturing firms between 1992 and 2003 and use the results for counterfactual experiments. We find that increases in the crowdedness of foreign markets have reduced Italian exports by around 0.2%-0.3% per year. However, other factors such as higher unit labor costs and weak demand growth in Italy's main export market (the EU15) have been much more important in explaining Italian export performance. Our results also indicate that China's impact on Italian exports is small and if anything positive.Download Info
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Bibliographic Info
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7975.Length:
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:cpr:ceprdp:7975
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Related research
Keywords: Competition; Exporters; Foreign Markets; International Trade;Other versions of this item:
- Holger Breinlich & Alessandra Tucci, 2011. "Foreign market conditions and export performance: does `crowdedness' reduce exports?," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 991-1019, August.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F15 - International Economics - - Trade - - - Economic Integration
References
References listed on IDEASPlease 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.:
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Nicholas Crafts & Marco Magnani, 2011.
"The Golden Age and the Second Globalization in Italy,"
Quaderni di storia economica (Economic History Working Papers)
17, Bank of Italy, Economic Research and International Relations Area.
- Crafts, Nicolas & Magnani, Marco, 2011. "The Golden Age and the Second Globalization in Italy," CAGE Online Working Paper Series 60, Competitive Advantage in the Global Economy (CAGE).
- Crafts, Nicholas, 2012.
"Western Europe’s Growth Prospects: an Historical Perspective,"
CAGE Online Working Paper Series
70, Competitive Advantage in the Global Economy (CAGE).
- Crafts, Nicholas, 2012. "Western Europe's Growth Prospects: an Historical Perspective," CEPR Discussion Papers 8827, C.E.P.R. Discussion Papers.
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