Chinese competition in OECD markets: impact on the export position and export strategy of OECD countries

Abraham, Filip; Hove, Jan Van

doi:10.1080/17487870.2011.577647

Cited by 11 publications

(5 citation statements)

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“…More interestingly, we find that the rapid increase in China's export shares in many of the divisions of the machinery and equipment group in the OECD markets has determined a competitive effect on Italy's export prices for high technology products (table 3) and for products included in the case of very specific sectors such as power machines, specialized machineries and metalworking as well as more heterogeneous ones as the electronics, a result in line with the findings by Abraham and Van Hove (2011) who find a strong competitive effect on market shares from China in a number of similar sectors for a sample including intra-OECD trade. At the same time, we find that market competition from other developed countries has pushed Italian prices down only in the group including transport equipment.…”

Section: Table 4 Heresupporting

confidence: 86%

China’s competition and the export price strategies of developed countries

Giovannetti

Sanfilippo

2016

International Review of Applied Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper analyzes the impact of Chinese competition on developed countries export prices, with a focus on Italy. After a theoretical discussion of the channels affecting export prices in presence of competitors from low income countries, we estimate the pricing behavior of two major manufacturing sectors, consumer goods and machinery, distinguishing destination markets according to their income level. Results show that export competition from China has affected Italian price strategies over the period 2000-08, in an idiosyncratic way according to the income level of importers, sector and technology level of products exported. Contrary to what observed for other high-income countries, we find that Italy has followed a very specific strategy to face Chinese competition. Instead of changing "between sector", moving up to the technology ladder, Italy has kept its specialization in traditional sectors and has upgraded the quality of its low-tech and laborintensive products, when in direct competition with Chinese ones. For higher technology products, on the other hand, it has adjusted prices downward to reduce Chinese competitive pressure, especially in segments where it does not hold a comparative advantage, while it has fostered differentiation only for some niche products within the sectors with higher specialization. Terms of use: Documents in JEL:F10, F14 Keywords: China, export price competition, Italy Abstract This paper analyzes the impact of Chinese competition on developed countries export prices, with a focus on Italy. After a theoretical discussion of the channels affecting export prices in presence of competitors from low income countries, we estimate the pricing behavior of two major manufacturing sectors, consumer goods and machinery, distinguishing destination markets according to their income level. Results show that export competition from China has affected Italian price strategies over the period 2000-08, in an idiosyncratic way according to the income level of importers, sector and technology level of products exported. Contrary to what observed for other high-income countries, we find that Italy has followed a very specific strategy to face Chinese competition. Instead of changing "between sector", moving up to the technology ladder, Italy has kept its specialization in traditional sectors and has upgraded the quality of its low-tech and laborintensive products, when in direct competition with Chinese ones. For higher technology product...

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Section: Table 4 Heresupporting

confidence: 86%

China’s competition and the export price strategies of developed countries

Giovannetti

Sanfilippo

2016

International Review of Applied Economics

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“…Evidence is given by Sakakibara and Porter () using data from Japan, Kostevc () using data from Slovenia, Clougherty and Zhang () using data from 19 countries, and Bramati et al () using data from Belgium. Regarding foreign competition, as Kostevc () finds that it positively influences export growth, Abraham and Van Hove () show that foreign competition from China negatively affects the export market share of OECD countries…”

Section: Literature Reviewmentioning

confidence: 99%

“…Chen, Imbs, and Scott () for example, stress how openness influences competition. The emergence of China in the manufacturing sector has contributed remarkably to the rise in global competition (Abraham & Van Hove, )…”

Section: Introductionmentioning

confidence: 99%

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Reaching up and reaching out: The impact of competition on firms’ productivity and export decisions

Yan

Hynes

2018

Pacific Economic Review

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Using firm‐level data from 139 countries, this paper investigates the effect of competition in both the domestic and foreign markets on firm productivity and export decisions. Applying a sample selection endogenous treatment (SSET) Poisson model that tackles both the issue of endogenous sample selection and endogenous treatment at the same time, we document robust evidence that strong competition in the domestic market propels firms to be more productive, and decreasing domestic competition increases firms’ propensity to export. However, firms’ export intensity (i.e. how much they export) is not directly influenced by competition in the domestic market. Moreover, lower competition in the foreign market increases the propensity of domestic firms to export, enlarging the set of exporting firms to include firms with relatively smaller export amounts.

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“…In earlier work, we used detailed sector data to assess how Chinese competition harms OECD countries’ export performance in other OECD markets (see Abraham and Van Hove, ). In this paper, we build on the empirical literature on heterogeneous exporting firms (Helpman et al ., ), including multi‐product firms, to study how Belgian firms cope with Asian competition taking into account product‐level information at the firm level.…”

Section: Introductionmentioning

confidence: 99%

David vs. Goliath? Smaller European Exporting firms facing Asian competition on global markets

Abraham

Hove

Studnicka

2016

Scottish J Political Eco

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This paper analyses the presence of Asian competition in the export markets of Belgian manufacturing firms between 1998 and 2010. We focus on the value of exports at the firm level where we consider both the intensive and the extensive margin. Within Asia a distinction is made between China, India, Hong Kong, Japan, Singapore, South Korea, and Taiwan. We find that Asian competition matters significantly for Belgian export companies.

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Chinese competition in OECD markets: impact on the export position and export strategy of OECD countries

Cited by 11 publications

References 44 publications

China’s competition and the export price strategies of developed countries

China’s competition and the export price strategies of developed countries

Reaching up and reaching out: The impact of competition on firms’ productivity and export decisions

David vs. Goliath? Smaller European Exporting firms facing Asian competition on global markets

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