The price and income elasticities of the top clothing exporters: Evidence from a panel data analysis
This paper studies the main export function features of twelve top clothing exporters (China, Hong Kong, France, Germany, India, Indonesia, Italy, Netherlands, Spain, Turkey, UK and USA) in the period between 1992 and 2011. Price and income elasticities are estimated for each country using a panel data approach, after controlling for nonstationarity, cointegration and Granger causality. Rolling regressions are also performed, and show the existence of elasticities instability over time. The analysis suggests that most advanced countries, including Hong Kong, changed their position in the clothing global value chain towards an “organisational” role. China confirms its leadership in clothing exports although its rising price elasticity sounds a warning with regard to future prospects.
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