The Gains from Variety in the European Union

Review of World Economics (Impact Factor: 0.78). 01/2010; 148(11477). DOI: 10.1007/s10290-012-0126-1
Source: RePEc


In this paper we examine the impact of membership in Preferential Trade Agreements (PTAs) on trade between PTA members. Rather than considering the impact of PTA membership on the volume of trade we consider the impact of membership on the structure of trade. For a large sample of countries over the period 1962-2000 we find that membership in a PTA is associated with an increase in the extent of intra-industry trade. In addition, we find that the effect of PTA membership on IIT is larger when a PTA is formed between two developed countries.

9 Reads
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: Este trabajo investiga las ganancias de bienestar a través de las importaciones españolas de nuevas variedades entre 1988 y 2006 usando la metodología propuesta por Feenstra (1994) y Broda y Weinstein (2006). Después de calcular la elasticidad de sustitución para un gran número de productos importados, estimamos que la ganancia de bienestar asociada a la proliferación de variedades importadas en España es equivalente al 1,2 por 100 del PIB de 2006. A continuación descomponemos la contribución que tiene cada país exportador a dicha ganancia de bienestar. China aparece como el país más importante con una contribución cercana al 12 por 100, casi la misma que todo el conjunto de la UE-15.
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: We propose an export price indicator adjusted for non-price factors as a measure of a country's competitiveness. Based on the approach by Broda and Weinstein (2006) who adjust price developments for changes in varieties of imported products, we relax their assumption of unchanged quality over time and apply this index to export prices of the ten CESEE EU Member States which acceded in 2004 and 2007. The index is calculated using data from Comext at the highly disaggregated eight-digit CN product level. Our analysis spans the time period from 1999 to 2010, thus including the recent global recession in 2009. The results show that all CESEE10 countries experienced loss in price competitiveness, although much smaller than is usually suggested by the traditional CPI-based or ULC-based real effective exchange rate measures. Although relative export prices (unit values) increased stronger in CESEE10 countries as compared with their competitors, the average quality of their goods increased even more, thus fully compensating for the rise in prices. These improvements in non-price competitiveness were pronounced in all CESEE10 countries.
  • [Show abstract] [Hide abstract]
    ABSTRACT: By utilizing previously unexplored plant–product data on Korean manufacturing, and detailed import data for 1991–1998, this paper empirically investigates whether greater access to imported intermediate varieties enhanced plant total factor productivity and product‐switching behavior. First, consistent with previous empirical studies, we find that a plant that belonged to industries with higher imported intermediate variety growth experienced higher productivity growth. Second, our empirical results suggest that increased imported intermediate varieties stimulated the product‐switching behavior of domestic plants. Because product‐switching behavior (i.e. simultaneously adding and dropping products) could be understood as a part of the continual process of ‘creative destruction’ within plants, our results imply that imported intermediate variety growth may be one of the channels through which resource reallocation within plants can be promoted.
    Asian Economic Journal 06/2013; 27(2). DOI:10.1111/asej.12006 · 0.54 Impact Factor
Show more


9 Reads
Available from