What Explains Germanyâ€™s Rebounding Export Market Share?
Germanyâ€™s export market share increased since 2000, while most industrial countries experienced declines. This study explores four explanations and evaluates their empirical contributions: (i) improved cost competitiveness, (ii) ties to fast growing trading partners, (iii) increased demand for capital goods, and (iv) regionalized production of goods (e.g. off-shoring). An export model is estimated covering the period 1993â€“2005. The dominant factor explaining the increase in market share are trade relationships with fast growing countries. Regionalized production in the export sector also played a part. Improved cost competitiveness had a comparatively smaller impact. There is no conclusive evidence of increased demand for capital goods.
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