IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

New trade theory, non-price competitiveness and export performance

  • Athanasoglou, Panayiotis P.
  • Bardaka, Ioanna C.

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.

If 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.

File URL:
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 27 (2010)
Issue (Month): 1 (January)
Pages: 217-228

in new window

Handle: RePEc:eee:ecmode:v:27:y:2010:i:1:p:217-228
Contact details of provider: Web page:

References listed on IDEAS
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.:

as in new window
  1. Stephen J. Turnovsky, 1968. "International Trading Relationships for a Small Country: The Case of New Zealand," Canadian Journal of Economics, Canadian Economics Association, vol. 1(4), pages 772-790, November.
  2. Johansen, S., 1991. "Determination of Cointegration Rank in the Presence of a Linear Trend," Papers 76a, Helsinki - Department of Economics.
  3. Goldstein, Morris & Khan, Mohsin S., 1985. "Income and price effects in foreign trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 20, pages 1041-1105 Elsevier.
  4. Ralf Ruhwedel & Michael Funke, 2000. "Export Variety and Export Performance: Empirical Evidence from East Asia," Quantitative Macroeconomics Working Papers 20006, Hamburg University, Department of Economics.
  5. Krugman, Paul, 1989. "Differences in income elasticities and trends in real exchange rates," European Economic Review, Elsevier, vol. 33(5), pages 1031-1046, May.
  6. Martine Durand, 1986. "Method of Calculating Effective Exchange Rates and Indicators of Competitiveness," OECD Economics Department Working Papers 29, OECD Publishing.
  7. Grossman, Gene & Helpman, Elhanan, 1995. "Technology and Trade," CEPR Discussion Papers 1134, C.E.P.R. Discussion Papers.
  8. K. Prodromidis, 1975. "Greek disaggregated import and export demand functions," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 111(2), pages 370-380, 06.
  9. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
  10. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  11. Menzie D. Chinn, 2005. "Doomed to Deficits? Aggregate U.S. Trade Flows Re-Examined," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(3), pages 460-485, October.
  12. John F. Wilson & Wendy E. Takacs, 1977. "Differential responses to price and exchange rate influences in the foreign trade of selected industrial countries," International Finance Discussion Papers 104, Board of Governors of the Federal Reserve System (U.S.).
  13. Bierens, Herman J., 1997. "Testing the unit root with drift hypothesis against nonlinear trend stationarity, with an application to the US price level and interest rate," Journal of Econometrics, Elsevier, vol. 81(1), pages 29-64, November.
  14. Schatz, Klaus-Werner, 1989. "Comments 'differences in income elasticities and trends in real exchange rates' by Paul Krugman," European Economic Review, Elsevier, vol. 33(5), pages 1050-1054, May.
  15. Athanasoglou, Panayiotis P., 1990. "A disequilibrium model for a small open economy," Economics PhD Theses 0190, Department of Economics, University of Sussex.
  16. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
  17. Elisabetta Falcetti & Luis Catão, 1999. "Determinants of Argentina’s External Trade," IMF Working Papers 99/121, International Monetary Fund.
  18. Venables, Anthony J, 1985. "International Trade, Trade and Industrial Policy and Imperfect Competition: A Survey," CEPR Discussion Papers 74, C.E.P.R. Discussion Papers.
  19. Bierens, Herman J., 1993. "Higher-order sample autocorrelations and the unit root hypothesis," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 137-160.
  20. Gary Madden & Scott Savage & Su Yin Thong, 1999. "Technology, investment and trade: empirical evidence for five Asia-Pacific countries," Applied Economics Letters, Taylor & Francis Journals, vol. 6(6), pages 361-363.
  21. Johansen, S., 1991. "Testing Weak Exogeneity and the Order of Cointegration in UK Money Demand Data," Papers 78, Helsinki - Department of Economics.
  22. Iwata, Kazumasa, 1989. "Comments 'differences in income elasticities and trends in real exchange rates' by Paul Krugman," European Economic Review, Elsevier, vol. 33(5), pages 1047-1049, May.
  23. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-25, May.
  24. Pesaran, M. Hashem & Shin, Yongcheol & Smith, Richard J., 2000. "Structural analysis of vector error correction models with exogenous I(1) variables," Journal of Econometrics, Elsevier, vol. 97(2), pages 293-343, August.
  25. Engle, Robert F. & Hendry, David F., 1993. "Testing superexogeneity and invariance in regression models," Journal of Econometrics, Elsevier, vol. 56(1-2), pages 119-139, March.
  26. Juselius, Katarina, 1995. "Do purchasing power parity and uncovered interest rate parity hold in the long run? An example of likelihood inference in a multivariate time-series model," Journal of Econometrics, Elsevier, vol. 69(1), pages 211-240, September.
  27. Luis Catão & Elisabetta Falcetti, 2002. "Determinants of Argentina’s External Trade," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 19-57, May.
  28. Muscatelli, V A & Srinivasan, T G & Vines, D, 1992. "Demand and Supply Factors in the Determination of NIE Exports: A Simultaneous Error-Correction Model for Hong Kong," Economic Journal, Royal Economic Society, vol. 102(415), pages 1467-77, November.
  29. Muscatelli, Vito Antonio & Stevenson, Andrew A & Montagna, Catia, 1995. "Modeling Aggregate Manufactured Exports for Some Asian Newly Industrialized Economies," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 147-55, February.
  30. Sato, Kazuo, 1977. "The Demand Function for Industrial Exports: A Cross-Country Analysis," The Review of Economics and Statistics, MIT Press, vol. 59(4), pages 456-64, November.
  31. Goldstein, Morris & Khan, Mohsin S, 1978. "The Supply and Demand for Exports: A Simultaneous Approach," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 275-86, May.
  32. Riedel, James, 1988. "The Demand for LDC Exports of Manufactures: Estimates from Hong Kong," Economic Journal, Royal Economic Society, vol. 98(389), pages 138-48, March.
  33. Muscatelli, Vito Antonio & Srinivasan, T G & Vines, David, 1992. "Demand and Supply Factors in the Determination of NIE Exports: A Simultaneous Error-Correction Model for Hong Kong Exports," CEPR Discussion Papers 671, C.E.P.R. Discussion Papers.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:27:y:2010:i:1:p:217-228. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.