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N° 2009-09 |
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| April 2009 |
| Market Positioning of Varieties in World Trade: is Latin America Losing Out on Asia? |
Nanno Mulder
Rodrigo Paillacar
Soledad Zignago |
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| There is increasing empirical evidence that trade specialisation and competition takes place in
varieties rather than in products or industries. This paper examines recent changes in the
export specialisation of Latin America and the Caribbean (LAC) and their Asian competitors
by looking at their vertical specialisation through prices. Three price (or quality) segments are
distinguished to compare export performance between the two regions using our BACI
database, which provides harmonised bilateral unit values for most countries in the world at
the most disaggregated product-level (5,000 products) for the period 1995 to 2004. The
technology-content of products is also taken into account. The evidence suggests that LAC is
losing out on China which is gaining large market shares, notably in the low-quality segment
and low-tech segment. However, LAC has retained its initial overall market share, by slightly
upgrading the quality and technology content of its exports. Our estimates of similarities in
export structures confirm that varieties exported by the two continents are very different.
Moreover, LAC export prices are much higher than those of China, but relatively similar to
the ones of other Asian nations. Finally, we analyse the determinants of unit values of Latin
American and Asian exports. Econometric tests confirm that the type of global competition
differs between the two regions: prices play a bigger role in the case of Asian exports,
whereas Latin America competes more on quality in world markets. |
Non-technical summary  |
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Résumé
non-technique
en français |
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| Full text |
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| Export unit values; vertical differentiation; Latin America; Asia |
Keywords |
| F1; F4 |
JEL classification |
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