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New trade theory, non-price competitiveness and export performance

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  • Athanasoglou, Panayiotis
  • Bardaka, Ioanna

Abstract

This paper develops a demand function for Greece's exports of manufactures according to New Trade Theory. Non-price competitiveness plays a vital role in explaining export performance and failure to include it in the export equation may lead to mis-specification error. Foreign income has a moderately high effect on exports in the long run and no effect in the short run. Exports are also sensitive to domestic and competitors' prices in the long run, but cost and price competitiveness elasticities are close to one, indicating that Greek exporters have some ability to compete on the basis of prices.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 32047.

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Date of creation: Jan 2010
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Handle: RePEc:pra:mprapa:32047

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Keywords: Export demand; Price and non-price competitiveness; New trade theory; Vector autoregressive error correction model;

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Citations

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Cited by:
  1. Panayiotis P. Athanasoglou, 2011. "The role of product variety and quality and of domestic supply in foreign trade," Working Papers 128, Bank of Greece.
  2. Athanasoglou Panagiotis & Backinezos Constantina & Evagelia A. Georgiou, 2010. "Export performance, competitiveness and commodity composition," Working Papers 114, Bank of Greece.

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