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Evidence of Product Differentiation and Relative Quality in Italian Trade

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Abstract

Intra-Industry Trade implies similar trade specialisation and is often associated with product differentiation. Differentiation depends on either quality or characteristics and two-way flows can be divided accordingly. If quality matters, we can measure relative quality of exports and imports. Our objective is to apply this analysis to Italian trade with industrialised countries. Our results suggest a prevalence of two-way flows at the aggregate level. This finding hides sectoral and bilateral heterogeneity. Vertical flows prevail over horizontal flows in most sectors and for most countries. That reduces the competitive concerns linked to the similar specialisation. Finally, quality of Italian exports is lower than that of imports, but seems to be increasing.

Suggested Citation

  • Stefano Chiarlone, 2000. "Evidence of Product Differentiation and Relative Quality in Italian Trade," KITeS Working Papers 114, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2000.
  • Handle: RePEc:cri:cespri:wp114
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    References listed on IDEAS

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    1. Lionel Fontagné & Michaël Freudenberg, 1997. "Intra-Industry Trade: Methodological Issues Reconsidered," Working Papers 1997-01, CEPII research center.
    2. Greenaway, David & Torstensson, Johan, 2000. "Economic Geography, Comparative Advantage and Trade within Industries: Evidence from the OECD," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 15, pages 260-280.
    3. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-973, October.
    4. David Greenaway & Robert Hine & Chris Milner, 1994. "Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 77-100, March.
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    Cited by:

    1. Haroon Mumtaz & Özlem Oomen & Jian Wang, 2011. "Exchange rate pass-through into U.K. import prices: evidence from disaggregated data," Staff Papers, Federal Reserve Bank of Dallas, issue June.
    2. Roberta Rabellotti & Alessia Amighini, 2003. "The effect of globalisation on industrial districts in Italy: evidence from the footwear sector," ERSA conference papers ersa03p500, European Regional Science Association.
    3. Agostino, Mariarosaria & Trivieri, Francesco, 2014. "Geographical indication and wine exports. An empirical investigation considering the major European producers," Food Policy, Elsevier, vol. 46(C), pages 22-36.
    4. Haroon Mumtaz & Özlem Oomen & Jian Wang, 2006. "Exchange rate pass-through into UK import prices," Bank of England working papers 312, Bank of England.
    5. Alessia Amighini & Roberta Rabellotti, 2003. "the effects of globalization on italian industrial districts: evidence from the footwear sector," Working Papers 64, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
    6. Mastooreh Eshraghi & Normaz Wana Ismail, 2013. "Intra Industry Trade and Product Quality: China and Eight Developing Countries," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 12(1), pages 59-72, June.
    7. Marco PLATANIA, 2014. "Trade Advantage Of Italian Industrial Districts:Persistence And Change," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 14(2).
    8. Pierluigi Montalbano & Silvia Nenci, 2011. "Are the Emerging Economies a Threat to the Italian Competitiveness?," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, December.
    9. Fabrizio Onida, 2003. "Growth, competitiveness and firm size: factors shaping the role of Italy’s productive system in the world arena," KITeS Working Papers 144, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2003.
    10. A. Ninni & M. Raimondi & M. Zuppiroli, 2006. "The success of “Made in Italy”: an appraisal of quality-based competitiveness in food markets," Economics Department Working Papers 2006-EP10, Department of Economics, Parma University (Italy).
    11. Alessia Amighini & Stefano Chiarlone, 2004. "Risk of the Chinese trade integration for the Italian trade specialisation," LIUC Papers in Economics 150, Cattaneo University (LIUC).
    12. Annamaria Simonazzi & Paolo Villa & Federico Lucidi, 2008. "Continuity and Change in the Italian Model: Italy's Laborious Convergence towards the European Social Model," Working Papers 108, University of Rome La Sapienza, Department of Public Economics.
    13. Hasan Faruq, 2006. "New Evidence on Product Quality and Trade," Caepr Working Papers 2006-019, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.

    More about this item

    Keywords

    Intra-Industry Trade; Trade specialisation; Quality and horizontal differentiation; Sectoral and bilateral Italian trade; Competitive pressure;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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