Non-Price Competitiveness of Exports from Emerging Countries

29 Pages Posted: 30 Nov 2013

See all articles by Konstantins Benkovskis

Konstantins Benkovskis

Bank of Latvia; Stockholm School of Economics in Riga

Julia Wörz

Oesterreichische Nationalbank (OeNB)

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Date Written: November 14, 2013

Abstract

Building on the methodology pioneered by Feenstra (1994) and Broda and Weinstein (2006), we construct an export price index that adjusts for changes in the set of competitors (variety) and changes in non-price factors (quality in a broad sense) for nine emerging economies (Argentina, Brazil, Chile, China, India, Indonesia, Mexico, Russia and Turkey). The highly disaggregated dataset covers the period 1996-2011 and is based on the standardised 6-digit Harmonized System (HS). Our method highlights notable differences in non-price competitiveness across markets. China shows a huge gain in international competitiveness due to non-price factors. Similarly, Brazil, Chile, India and Turkey show discernible improvements in their competitive position when accounting for non-price factors. Oil exports account for strong improvement in Russia's non-price competitiveness, as well as the modest losses of competitiveness for Argentina and Indonesia. Mexico's competitiveness deteriorates prior to 2006 and improves afterwards.

Keywords: non-price competitiveness, quality, relative export price, emerging countries

JEL Classification: C43, F12, F14, L15

Suggested Citation

Benkovskis, Konstantins and Wörz, Julia, Non-Price Competitiveness of Exports from Emerging Countries (November 14, 2013). ECB Working Paper No. 1612. Available at SSRN: https://ssrn.com/abstract=2354236

Konstantins Benkovskis (Contact Author)

Bank of Latvia ( email )

Riga
Latvia

Stockholm School of Economics in Riga ( email )

Strelnieku iela 4a
Riga, LV 1010
Latvia

Julia Wörz

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner-Platz 3, PO Box 61
Vienna,
1010 Vienna, A-1011
Austria

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