Vertical Product Differentiation in International Trade: an Econometric Investigation

Arbeitspapier

This paper presents a detailed econometric investigation of vertical product (i.e. quality) differentiation in EU markets. Use is made of trade statistics at the most detailed (8-digit CN) level to analyse the pattern of quality positioning in EU trade (of EU memebers and non-EU countries.) Two different 'quality indicators' are devised one refers to the relative representation of producers in different quality segments in EU markets, the other amounts to the compilation of industry-level price gaps. Evidence is found for dramatic and rather stable hierarchical structures in the product qualities supplied by different national producers. The quality hierarchies are then related to a host of supply-side variables wage rates, productivity levels, industrial research and development spending, exchange rate movements. the econometric analyses supports arather robust explanatory framework relating the quality positioning of national producers to their relative supply-side characteristics.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: wiiw Working Paper ; No. 8

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Innovation and Invention: Processes and Incentives ; Management of Technological Innovation and R&D
• Subject: Vertical product differentation ; international trade ; quality competition ; EU markets

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fersterer, J. ; Landesmann, Michael
• Event: Veröffentlichung
• (who): The Vienna Institute for International Economic Studies (wiiw)
• (where): Vienna
• (when): 1998

Further information

• Handle: http://hdl.handle.net/10419/203873
• Last update: 10.03.2025, 11:43 AM CET