Sectoral and geographical positioning of the EU in the international division of labour
AbstractToday’s international trade in goods is driven mainly by the growth of exports and imports of the South. Emerging countries naturally gain global market shares in manufactured goods from old industrialised countries, including Europe. This trend has became even more pronounced during the last years. We use a detailed and exhaustive database on world trade from 1995 to 2003 to study the way in which the EU as a whole, and each of its 25 members individually faced these recent evolutions of the world market, compared to their main economic partners. For simplicity reasons, and because most European countries sell more and better on the domestic (EU) market, we disregard intra-EU trade flows. Our analysis draws on a number economic indicators, including the evolution of market shares, adaptation effects, and the revealed comparative advantage, and on a shift-share decomposition of market share growth. First, we examine the overall evolution of countries’ market shares, their geographical and sectoral specialisation, export performance, and capacity to adapt to changes in the global demand. Secondly, detailed results on the positioning and the performance of exports on different segments of the world market are produced. In both cases trade unit-values data is employed to separate the evolution of exports in monetary (value), and physical (volume) terms. This differentiation is necessary to distinguish between the impact of pure demand, and price-related factors on countries’ exports performance. Unit values are used as well to segment markets according to the quality of traded products according to the principle that high-quality products (up-market) are also the more expensive ones. Nevertheless, besides intrinsic quality this taxonomy reflects additional aspects, such as trade-mark effects or the capacity of countries to sell their products at high prices. EU’s position on the global market has eroded during the last years, because of the poor performance of its largest members (except Germany), and despite the favourable sectoral breakdown of its exports. Still, its losses in market share were considerably smaller than those of its American and Japanese competitors, due mainly to the ability of European firms to sell expensive products to foreign consumers. The EU reinforced or acquired leadership in up-market products in a large number of industries, ranging from leather and clothing to machinery and automobiles. At the same time, European countries suffered important market share losses in the high-technology sector. Moreover, the revealed comparative advantage indicator shows that the EU, contrary to other developed countries, does not exhibit a specialisation in high-technology products. This result is explained by the large and deepening disadvantage of EU countries in down-market high-tech products, such as computer devices. Nevertheless, the EU has maintained and even reinforced its comparative advantage in up-market (high-price/high-quality) high-technology products.
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 University Library of Munich, Germany in its series MPRA Paper with number 42660.
Date of creation: Jul 2008
Date of revision:
trade; competitivness; market shares; export performance; comparative advantage; shift-share;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
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.:
- Lionel Fontagné & Michaël Freudenberg & Deniz Ünal-Kesenci, 1999. "Haute technologie et échelles de qualité : de fortes asymétries en Europe," Working Papers 1999-08, CEPII research center.
- Angela Cheptea & Guillaume Gaulier & Soledad Zignago, 2004.
"The World Market: Market Shares and Export Performances,"
La Lettre du CEPII,
CEPII research center, issue 231.
- Angela Cheptea & Guillaume Gaulier & Soledad Zignago, 2005. "World Trade Competitiveness: A Disaggregated View by Shift-Share Analysis," Working Papers 2005-23, CEPII research center.
- repec:laf:wpaper:201005 is not listed on IDEAS
- Monfort, Philippe & Vandenbussche, Hylke & Forlani, Emanuele, 2008. "Chinese Import Competition and Skill Upgrading in European Textiles," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/162553, Katholieke Universiteit Leuven.
- Guillaume Gaulier & Françoise Lemoine & Deniz Ünal, 2012. "The rise of emerging economies in the EU15 trade," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 9(1), pages 133-175, April.
- Monfort, philippe & Vandenbussche, Hylke & Forlani, Emanuele, . "Skill-upgrading in European textiles resulting from trade with China: firm-level evidence," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/162565, Katholieke Universiteit Leuven.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.