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Declining german export prices due to increased competition from newly industrializing countries - evidence from germany and the ceecs

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  • Sebastian Gundel

Abstract

In this paper, the export demand and supply of German manufacturing industry is estimated for the period 1993 to 2005. The Johansen procedure (1991, 1994) is applied to estimate the long-run relationship in a VECM. Special attention is paid to the development of the German export prices being exposed to the competitive environment of fast growing countries like Hungary, the Czech Republic and Poland. Since they offer similar high-technology products on the international export markets and are gaining the market share, German export prices are under downward pressure. The results show that German export prices grow at a slower pace than that of the competitors and that they are negatively influenced by the growing market share of the CEECs. On the export demand side, the empirical picture corresponds to the theoretical one displaying a less unity income elasticity of demand indicating the decreasing market share for German manufactures in the long run.

Suggested Citation

  • Sebastian Gundel, 2008. "Declining german export prices due to increased competition from newly industrializing countries - evidence from germany and the ceecs," Prague Economic Papers, University of Economics, Prague, vol. 2008(1), pages 3-22.
  • Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:1:id:316:p:3-22
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    References listed on IDEAS

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    1. Pinelopi Koujianou Goldberg & Michael M. Knetter, 1997. "Goods Prices and Exchange Rates: What Have We Learned?," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1243-1272, September.
    2. Filippo di Mauro & Robert Anderton & Ekkehard Ernst & Laurent Maurin & Sonia Pokutova & Wim Melyn & Axel Jochem & N. M. Pakinezou & Javier Torres & Remy Lecat & Mark Cassidy & Roberto Tedeschi & Erik , 2005. "Competitiveness and the export performance of the euro area," Occasional Paper Series 30, European Central Bank.
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    Citations

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    Cited by:

    1. Karel Janda & Eva Michalíková & Věra Potácelová, 2010. "Gravitační a fiskální modely státní podpory exportních úvěrů v České republice
      [Gravity and Fiscal Models of Government Support of Export Credit in the Czech Republic]
      ," Politická ekonomie, University of Economics, Prague, vol. 2010(3), pages 305-325.

    More about this item

    Keywords

    competition; cointegration; Manufactured Exports; VECM;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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