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“Made in China”: how does it affect our understanding of global market shares?

Author

Listed:
  • Benkovskis Konstantins

    () (Monetary Policy Department, Latvijas Banka, Kr.Valdemara iela 2A, Riga, LV-1050, Latvia)

  • Wörz Julia

    (Foreign Research Division, Oesterreichische Nationalbank, 1090 Vienna, Austria)

Abstract

We propose a comprehensive decomposition of changes in global market shares that accounts for the value-added content. We find that the ongoing globalization process affects market shares directly by shifting production from developed to developing countries. Moreover, apparent improvements in the relative quality of exported goods from most new EU member states and developing countries occur to some extent from higher quality imported inputs. Hence, the process of outsourcing high-quality production from developed countries plays an important role and reduces the contribution of residual non-price factors in explaining market share gains of developing countries.

Suggested Citation

  • Benkovskis Konstantins & Wörz Julia, 2018. "“Made in China”: how does it affect our understanding of global market shares?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 18(2), pages 1-26, June.
  • Handle: RePEc:bpj:bejmac:v:18:y:2018:i:2:p:26:n:10
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    References listed on IDEAS

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    1. Angela Cheptea & Lionel Fontagné & Soledad Zignago, 2014. "European export performance," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(1), pages 25-58, February.
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    Citations

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    Cited by:

    1. João Amador & Sónia Cabral, 2017. "Networks of Value-added Trade," The World Economy, Wiley Blackwell, vol. 40(7), pages 1291-1313, July.
    2. repec:onb:oenbfi:y:2017:i:q3/17:b:2 is not listed on IDEAS
    3. Alberto Felettigh & Giacomo Oddo, 2016. "Market shares in manufacturing value-added: is the picture different?," Questioni di Economia e Finanza (Occasional Papers) 336, Bank of Italy, Economic Research and International Relations Area.
    4. repec:bla:etrans:v:25:y:2017:i:1:p:91-109 is not listed on IDEAS

    More about this item

    Keywords

    China; fragmentation; non-price factors; value-added content of trade;

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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