Upgrading and relative competitiveness in manufacturing trade: Eastern europe versus the newly industrializing economies

Herman W. Hoen, Eliza H. van Leeuwen

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    8 Citations (Scopus)

    Abstract

    The purpose of this paper is to compare a group of three countries of the Council for Mutual Economic Assistance (Czechoslovakia, Hungary and Poland, hereafter CMEA(3)) and of
    three newly industrializing economies (Hongkong, the Republic of
    Korea and Taiwan, hereafter NIE(3)) with respect to the competitiveness of their manufacturing exports to Western Europe. 1 In order to
    get an indicator of changing competitiveness, we will first apply a
    constant market-shares analysis. Second, differences in competitiveness will be explored in terms of quality differentiation. This part of
    the analysis will be restricted to clothing (SITC 84), because clothing
    is the only 2-digit commodity group with a share exceeding 5 per cent
    of the manufacturing exports to EUR(8) of both CMEA(3) and
    NIE(3). Taking relative unit values of the different trade flows as an
    approximation of quality levels, we will pose the following hypotheses: (i)the clothing exports of NIE(3) and CMEA(3) are concentrated at lower quality segments than the exports of the developed
    countries; (ii) industrialization of NIE(3) is accompanied by a process
    of upgrading which results in higher relative unit values of its clothing
    exports and a move into higher quality segments; (iii) as a consequence of upgrading, NIE(3) competes to an increasing extent with
    CMEA(3) on the same quality segments.
    Original languageEnglish
    Pages (from-to)368-379
    Number of pages12
    JournalWeltwirtschaftliches Archiv=Review of world economics
    Volume127
    Issue number2
    DOIs
    Publication statusPublished - 1991

    Keywords

    • VERTICAL PRODUCT DIFFERENTIATION
    • MARKET-SHARES ANALYSIS

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