Exports And Property Prices In France: Are They Connected?
AbstractFrance has seen a marked deterioration in its export performance in the last 10 years or so. Previous empirical research pointed out that weak export performance was due to i) vigorous domestic demand; ii) lower mark-ups due to head-to-head competition with Germany; iii) low non-price competitiveness of French export goods; iv) offshoring of entire production processes (especially in the automobile sector); and v) difficulties of French manufacturing firms to reach critical size for exporting. This paper adds an additional explanation to this list. We argue that resource reallocation from the exporting to the construction sector triggered by fast rising property prices hindered France to meet world export demand vis-à-vis its products. Our econometric analysis shows that the resource reallocation argument helps explain French export performance between the early 2000s and 2007, unexplained by traditional models. This result is confirmed for a set of OECD countries that experienced a marked decline in their export performance and sustained realestate boom after 2000.
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Bibliographic InfoPaper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp985.
Date of creation: 01 May 2010
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OECD; France; Competitiveness; exports; export performance; construction; house prices; resource allocation;
Other versions of this item:
- Balázs Égert & Rafaƚ Kierzenkowski, 2014. "Exports and Property Prices in France: Are They Connected?," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 37(3), pages 387-409, 03.
- Balázs Égert & Rafal Kierzenkowski, 2010. "Exports and Property Prices in France: Are They Connected?," OECD Economics Department Working Papers 759, OECD Publishing.
- Balazs Egert & Rafal Kierzenkowski, 2010. "Exports and Property Prices in France: Are they Connected?," CESifo Working Paper Series 3047, CESifo Group Munich.
- F10 - International Economics - - Trade - - - General
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-14 (All new papers)
- NEP-EEC-2010-08-14 (European Economics)
- NEP-INT-2010-08-14 (International Trade)
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