Intra-industry trade between European Union and Transition Economies. Does income distribution matter?
Hubert Gabrisch, Maria Luigia Segnana
IWH Discussion Papers,
Nr. 155,
2002
Abstract
EU-TE trade is increasingly characterised by intra-industry trade. For some countries (Czech Republic), the share of intra-industry trade in total trade with the EU approaches 60 percent. The decomposition of intra-industry trade into horizontal and vertical shares reveals overwhelming vertical structures with strong quality advantages for the EU and shrinking quality advantages for TE countries wherever trade has been liberalised. Empirical research on factors determining this structure in an EU-TE framework has lagged theoretical and empirical research on horizontal trade and vertical trade in other regions of the world. The main objective of this paper is, therefore, to contribute to the ongoing debate over EU-TE trade structures, by offering an explanation of intra-industry trade. We utilize a cross-country approach in which relative wage differences and country size play a leading role. In addition, as implied by a model of the productquality
cycle, we examine income distribution factors as determinates of the emerging
EU-TE structure of trade flows. Using OLS regressions, we find first, that relative
differences in wages (per capita income) and country size explain intra-industry trade, when trade is vertical and completely liberalized and second, that cross country differences in income distribution play no explanatory role. We conclude that if increasing wage differences resulted from an increasing productivity gap between highquality and low-quality industries, then vertical structures will, over the long-term create significant barriers for the increase in TE incomes and lowering EU-TE income differentials.
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Lagging Productivity in the East German Economy: Obstacles to Fast Convergence
Joachim Ragnitz
Externe Publikationen,
2001
Abstract
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A Glimpse on Sectoral Convergence of Productivity Levels
Gerald Müller
IWH Discussion Papers,
Nr. 133,
2001
Abstract
This paper examines the presence of sectoral convergence of labor productivity between 14 OECD countries. Using the OECD International Sectoral Data Base (ISDB), the paper looks at the developments within 12 distinct sectors during the period 1970-1995. The change of the coefficients of variance suggests that there is strong sectoral convergence within most service sectors while the evidence of convergence for Manufacturing as well as for Communication is rather weak. These findings are in line with most studies undertaken on this subject so far. It is concluded that economic theories at hand to explain growth and convergence (or divergence respectively) are of different importance for the sectors concerned. While models of the New Growth Theory seemed to be useful to explain growth mechanisms within Manufacturing and Communication, traditional models seemed to apply to most other sectors.
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EU-Integration and Development - Prospects of CEECs - The Productivity-Gap and Technological Structural Change
Johannes Stephan
IWH Discussion Papers,
Nr. 112,
2000
Abstract
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Smaller Productivity Gap Between German Regions When Different Producer Prices are Taken into Account
Gerald Müller
IWH Discussion Papers,
Nr. 89,
1999
Abstract
Der Vergleich von 300 Erzeugerpreisen zeigt, dass vergleichbare Produkte in Ostdeutschland etwa 20 Prozent preiswerter sind als in Westdeutschland. Durch die Verwendung von Regressionsschätzungen lässt sich ein Konfidenzintervall für diesen Wert berechnen. Weitere Rechnungen mit Hilfe von Input-Output-Tabellen zeigen, dass auf gesamtwirtschaftlicher Ebene rechnerisch etwa zehn Prozentpunkte der Produktivitätslücke auf die niedrigeren Erzeugerpreise zurückzuführen sind.
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