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Measuring the price elasticity of import demand in the destination markets of italian exports

Author

Listed:
  • Alberto Felettigh
  • Stefano Federico

Abstract

We compare the price elasticity of import demand in the destination markets of Italian exports to the price elasticity in the destination markets of the other main euro-zone countries? exports. We use the elasticities of substitution across varieties estimated for each destination market by Broda, Greenfield and Weinstein (2006). We find that Italy exports to markets that have, on average, lower price elasticity than the markets to which France, Germany and Spain sell their exports. The result is mainly driven by the motor vehicle and other transport equipment sectors. Net of these two industries, the average export elasticities of the four countries are basically identical. The sectoral and geographical composition of Italian exports therefore does not seem to expose them to a relatively more elastic demand, contrary to the indications found in part of the literature.

Suggested Citation

  • Alberto Felettigh & Stefano Federico, 2011. "Measuring the price elasticity of import demand in the destination markets of italian exports," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2011(1), pages 127-162.
    • Handle: RePEc:fan:polipo:v:html10.3280/poli2011-011005
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    Cited by:

    1. Escalante, Luis & Mamboundou, Pierre, 2024. "Adapting fiscal strategies to energy and food price shocks in Portugal," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 651-665.
    2. Donatella Baiardi & Carluccio Bianchi & Eleonora Lorenzini, 2013. "The Clothing Export Performance and Prospects for Advanced and Emerging Economies: Evidence from a Panel Data Analysis," DEM Working Papers Series 038, University of Pavia, Department of Economics and Management.
    3. Silvia Fabiani & Alberto Felettigh & Claire Giordano & Roberto Torrini, 2019. "Making room for new competitors. A comparative perspective on Italy’s exports in the euro-area market," Questioni di Economia e Finanza (Occasional Papers) 530, Bank of Italy, Economic Research and International Relations Area.
    4. Guglielmo Forges Davanzati & Rosario Patalano & Guido Traficante, 2019. "The Italian economic stagnation in a Kaldorian theoretical perspective," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(3), pages 841-861, October.
    5. Giordano, Claire & Lopez-Garcia, Paloma, 2019. "Firm heterogeneity and trade in EU countries: a cross-country analysis," Occasional Paper Series 225, European Central Bank.
    6. Giorgia Giovannetti & Marco Sanfilippo, 2016. "China’s competition and the export price strategies of developed countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 30(2), pages 238-254, March.
    7. Donatella Baiardi & Carluccio Bianchi & Eleonora Lorenzini, 2013. "The Clothing Export Performance and Prospects for Advanced and Emerging Economies: Evidence from a Panel Data Analysis (new version)," DEM Working Papers Series 040, University of Pavia, Department of Economics and Management.
    8. Cristina Manteu & Sónia Cabral, 2013. "The price elasticity of external demand of Portuguese exports: a comparison with other euro area countries," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    9. Oliver Holtemöller & Götz Zeddies, 2013. "Has the Euro increased international price elasticities?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(1), pages 197-214, February.
    10. Piero Esposito & Claudio Vicarelli, 2011. "Explaining the Performance of Italian Exports during the Crisis: (Medium) Quality Matters," Working Papers LuissLab 11954, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    11. repec:ptu:bdpart:b201318 is not listed on IDEAS
    12. Cristina Manteu & Sónia Cabral, 2011. "The price elasticity of external demand: how does Portugal compare with other euro area countries?," Working Papers w201127, Banco de Portugal, Economics and Research Department.

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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