On the Measurement of Changes in Product Quality in Marginal Intra-Industry Trade

Azhar, Abdul K. M.; Elliott, Robert J.R.

doi:10.1007/s10290-008-0145-0

Cited by 14 publications

(4 citation statements)

References 29 publications

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“…However, this study has some limitations. The study needs to research on vertical and horizontal MIIT because it can be shown the two-way trade of different endowments and quality products [17]. On the other hand, the study will use a different method to estimate labor cost such as the method proposed by [18,19] to solve some econometric problems such as endogeneity of some explanatory variable.…”

Section: Resultsmentioning

confidence: 99%

Labor Costs and Marginal Intra-Industry Trade: The Thailand Experience

Chemsripong¹

2014

TEL

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Thailand's international trade, exports in particular, expanded considerably after the major policy changes in 1990. According to this expansion, there was also a significant increase in intra-industry trade even though the major characteristic of Thailand trade is still inter-industry. However, intra-industry trade is hypothesized to reduce adjustment costs due to trade expansion and changes in trade compared to inter-industry trade. The main purpose of this paper is to examine the effects of increased Intra-Industry Trade (IIT) on the labor market adjustment cost, in view of the changes in Thailand's pattern of trade over the post-1990 period. The study is focused on the hypothesis that Intra-Industry Trade (IIT) expansion entails lower factor adjustment costs (Smooth Adjustment Hypothesis-SAH). A dynamic panel data approach is employed. The results suggest a negative correlation between changes in employment and Marginal Intra-Industry Trade (MIIT) and confirmation of the SAH. Given the increase in IIT as a proportion of Thailand's overall trade during the period under review, the adjustment in labor markets in the form of reduced employment from trade liberalization at that time is likely to have been less than that would have otherwise been expected.

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Section: Resultsmentioning

confidence: 99%

Labor Costs and Marginal Intra-Industry Trade: The Thailand Experience

Chemsripong¹

2014

TEL

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“…(2008) and Wang (2014). Some believe that there are flaws in measuring product quality simply by using price and also take into consideration the inputs and the costs of the materials used in the production process (Azhar and Elliott, 2008; Eshraghi and Ismail, 2013). Even with this additional research, there is still a view that the quality of a country's exports cannot be determined using the price and cost of inputs, and that quality is differentiated from the perspective of exporters and importers.…”

Section: Literature Reviewmentioning

confidence: 99%

Do Higher‐Quality Regional Trade Agreements Improve the Quality of Export Products from China to “One‐Belt One‐Road” Countries?*

Sun

2021

Asian Economic Journal

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The paper examines the impact of the quality of regional trade agreements (RTA) on the quality of China's exports to the ‘Belt and Road' countries. We use enterprise and product data from China and from 11 Belt and Road countries that have signed RTA with China. The quality of the RTA, as measured by clause coverage and law commitment indexes, significant impact in the quality of export products. In RTAs, the commitment rate plays an overall important role; however, the clause coverage rate of the new generation of WTO‐X agreements has a greater effect than for WTO+ agreements, especially for medium and high‐technology products, which must meet the high standards. The effect of high‐quality RTA is greater in improving the quality of Chinese state‐owned enterprises' products exported to Belt and Road countries when compared with those of private and foreign‐holding companies.

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“…For example, Brülhart and Elliott (2002), Brülhart et al (2006) and Cabral and Silva (2006) proposed empirical tests of the smooth-adjustment hypothesis (SAH) associated with MIIT. To discuss the SAH, a conventional decomposition into HIIT and VIIT is appropriate (Greenaway et al, 2002;Brülhart and Elliott, 2002;Azhar and Elliott, 2008a). According to the SAH, the adjustment costs associated with inter-industry trade are higher than those associated with IIT because a change in the former generally requires greater resource reallocation.…”

Section: Beyond Ghmmentioning

confidence: 99%

Product Quality and Intra-Industry Trade

Ito

Okubo

2016

Singapore Econ. Rev.

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In this study, we argue that the conventional intra-industry trade (IIT) index does not directly address the quality issue and propose a methodology to make full use of unit price gap information to deduce quality differences between simultaneously exported and imported products. By applying this measure to German trade data at the eight-digit level, we study the quality change of Chinese export goods in its IIT with Germany. We compare the case of China with those of Eastern European countries, which are also major trading partners of Germany. Our results show that the unit value difference in IIT between Germany and Eastern European countries is clearly narrowing. However, China’s export prices to Germany are much lower than Germany’s export prices to China, and this gap has not narrowed over the last 23 years. This is at odds with the common perception that China’s product quality has improved, as documented by Rodrik [Rodrik, D (2006). Whats so special about China’s exports? China and World Economy, 14(5), 1–19.] and Schott [Schott, P (2008). The Relative sophistication of Chinese exports. Economic Policy, 53, 5–49.]. Our results support Xu [Xu, B (2010). The sophistication of exports: Is China special? China Economic Review, 21(3), 482–493.], which argued that incorporating the quality aspect of the exported goods weakens or even eliminates the evidence of the sophistication of Chinese export goods in Rodrik [Rodrik, D (2006). Whats so special about China’s exports? China and World Economy, 14(5), 1–19.].

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On the Measurement of Changes in Product Quality in Marginal Intra-Industry Trade

Abstract: Intra-industry trade, adjustment costs, quality, product differentiation,

Cited by 14 publications

References 29 publications

Labor Costs and Marginal Intra-Industry Trade: The Thailand Experience

Labor Costs and Marginal Intra-Industry Trade: The Thailand Experience

Do Higher‐Quality Regional Trade Agreements Improve the Quality of Export Products from China to “One‐Belt One‐Road” Countries?*

Product Quality and Intra-Industry Trade

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