Exports and Property Prices in France: Are they Connected?

Balázs Égert and Rafal Kierzenkowski

No 3047, CESifo Working Paper Series from CESifo

Abstract: France has seen a marked deterioration in its export performance in the last 10 years or so. Previous empirical research pointed out that weak export performance was due to i) vigorous domestic demand; ii) lower mark-ups due to head-to-head competition with Germany; iii) low non-price competitiveness of French export goods; iv) offshoring of entire production processes (especially in the automobile sector); and v) difficulties of French manufacturing firms to reach critical size for exporting. This paper adds an additional explanation to this list. We argue that resource reallocation from the exporting to the construction sector triggered by fast rising property prices hindered France to meet world export demand vis-à-vis its products. Our econometric analysis shows that the resource reallocation argument helps explain French export performance between the early 2000s and 2007, unexplained by traditional models. This result is confirmed for a set of OECD countries that experienced a marked decline in their export performance and sustained real-estate boom after 2000.

Keywords: OECD; France; competitiveness; exports; export performance; construction; house prices; resource allocation (search for similar items in EconPapers)
JEL-codes: F10 F14 O14 O52 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Exports and Property Prices in France: Are They Connected? (2014)
Working Paper: Exports and Property Prices in France: Are They Connected? (2014)
Working Paper: Exports and Property Prices in France: Are They Connected? (2010)
Working Paper: EXPORTS AND PROPERTY PRICES IN FRANCE: ARE THEY CONNECTED? (2010)
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