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Moving up the Quality Ladder? EU-China Dynamics in Clothing

Author

Listed:
  • Vandenbussche, Hylke

    (Department of Economics, IRES-CORE, Université Catholique de Louvain)

  • Di Comite, Francesco

    (European Commission, Joint Research Centre (JRC), Institute for Prospective Technological Studies (IPTS))

  • Rovegno, Laura

    (Center of Research in Economic Analysis (CREA), University of Luxembourg)

  • Viegelahn, Christian

    (International Labour Organization (ILO) Office, Employment Trends Unit)

Abstract
We apply a simple method to study the relative quality of Chinese versus European products exported in the clothing sector after the end of the Multi-Fiber Arrangement. Based on the model of Foster et al., (2008), we interpret the change in relative export prices and quantities sold in narrowly defined product categories as an indicator of quality shifts. Using UN Comtrade data, we find that European varieties exported to the US typically sell for a higher price than identical Chinese varieties exported to the US, but this price gap is narrowing. Despite rising prices, Chinese varieties are gaining market share. This opposite movement of relative prices and quantities sold in the same destination market are a strong indication of China’s moving up the quality ladder in its clothing exports relative to the EU. While European core products in clothing are stable over time, Chinese exports show product dynamics with exit and entry of new core products every year.

Suggested Citation

  • Vandenbussche, Hylke & Di Comite, Francesco & Rovegno, Laura & Viegelahn, Christian, 2013. "Moving up the Quality Ladder? EU-China Dynamics in Clothing," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 28, pages 303-326.
    • Handle: RePEc:ris:integr:0602
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    Citations

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    Cited by:

    1. Sandrina Moreira & Nadia Simoes & Nuno Crespo, 2017. "A contribution to a multidimensional analysis of trade competition," The World Economy, Wiley Blackwell, vol. 40(10), pages 2301-2326, October.

    More about this item

    Keywords

    Trade; Quality upgrading; Import competition; Product dynamics;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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