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Quality-adjusted similarity of EU-countriesŽ export structure

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  • Kaitila, Ville

Abstract

We propose a new way to measure the extent to which countries compete in their exports. We augment the similarity index proposed by Finger and Kreinin (1979) with product quality. Quality is measured using unit export prices in the tradition of the horizontal/vertical intra-industry trade literature. We analyse the EU27 countries export structures using 1) overall similarity à la Finger and Kreinin, 2) same-quality similarity, and 3) quality-adjusted similarity that combines the first two measures. We find that the similarity of the export structures of the new member countries and the cohesion countries vis-à-vis the non-cohesion EU15 countries has increased, but that there remains a divide between them especially in terms of same-quality exports.

Suggested Citation

  • Kaitila, Ville, 2010. "Quality-adjusted similarity of EU-countriesŽ export structure," Discussion Papers 1227, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:dpaper:1227
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    2. Luca De Benedictis & Lucia Tajoli, 2007. "Openness, similarity in export composition, and income dynamics," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(1), pages 93-116.
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    4. Antimiani, Alessandro & Henke, Roberto, 2006. "Old and new partners: similarity and competition in the EU foreign trade," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10082, European Association of Agricultural Economists.
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    7. Finger, J M & Kreinin, M E, 1979. "A Measure of 'Export Similarity' and Its Possible Uses," Economic Journal, Royal Economic Society, vol. 89(356), pages 905-912, December.
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    Cited by:

    1. Kaitila, Ville, 2013. "Specialisation and/or Convergence: Structure of European Exports and Production," ETLA Working Papers 12, The Research Institute of the Finnish Economy.
    2. Crespo, Nuno & Simões, Nádia, 2012. "On the measurement of a multidimensional concept of structural similarity," Economics Letters, Elsevier, vol. 116(1), pages 115-117.

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    More about this item

    Keywords

    exports; similarity; quality;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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