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Exports and Property Prices in France: Are They Connected?

Author

Listed:
  • Balázs Égert

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Rafal Kierzenkowski

Abstract

type="main" xml:id="twec12122-abs-0001"> France has seen a marked deterioration in its export performance in the last 10 years or so. Previous empirical research pointed out that weak export performance was due to (i) vigorous domestic demand, (ii) lower markups due to head-to-head competition with Germany, (iii) low non-price competitiveness of French export goods, (iv) offshoring of entire production processes (especially in the automobile sector), and (v) difficulties of French manufacturing firms to reach critical size for exporting. This paper adds an additional explanation to this list. We argue that resource reallocation from the exporting to the construction sector triggered by fast rising property prices hindered France to meet world export demand vis-à-vis its products. Our econometric analysis shows that the resource reallocation argument helps explain French export performance between the early 2000s and 2007, unexplained by traditional models. This result is confirmed for a set of OECD countries that experienced a marked decline in their export performance and sustained real estate boom after 2000.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Balázs Égert & Rafal Kierzenkowski, 2014. "Exports and Property Prices in France: Are They Connected?," Post-Print hal-01385930, HAL.
    • Handle: RePEc:hal:journl:hal-01385930
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Real estate-driven exports
      by ? in VoxEU.org on 2013-10-02 06:00:00

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    Cited by:

    1. Florian Botte & Laurent Cordonnier & Thomas Dallery & Vincent Duwicquet & Jordan Melmies & Franck van de Velde, 2017. "The cost of capital: between losses and diversion of wealth [Le coût du capital : entre pertes et détournement de richesses]," Working Papers hal-01711157, HAL.
    2. Balázs Egert & Fredj Jawadi, 2018. "The Nonlinear Relationship between Economic growth and Financial Development," Working Papers hal-04141770, HAL.
    3. Sofronis Clerides, 2014. "The Collapse of the Cypriot Banking System: A Bird’s Eye View," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 8(2), pages 3-35, December.
    4. Abdul Rahman & Muhammad Arshad Khan, 2024. "Role of consistent regime-specific policies in recovering the negative relationship between financial development and economic growth," Economic Change and Restructuring, Springer, vol. 57(4), pages 1-27, August.
    5. Anupam Nanda & Jia-Huey Yeh, 2016. "International Transmission Mechanisms and Contagion in Housing Markets," The World Economy, Wiley Blackwell, vol. 39(7), pages 1005-1024, July.
    6. Marina Tkalec & Maruska Vizek, 2014. "Real estate boom and export performance bust in Croatia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 32(1), pages 11-34.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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