What Drives the Market Share Changes? Price Versus Non-Price Factors
Konstantins Benkovskis () and
Julia Woerz ()
No 2014/03, Working Papers from Latvijas Banka
The paper proposes a theoretical framework for explaining gains and losses in export market shares by considering both price and non-price determinants. Starting from a demand-side model a la Armington (1969), we relax several restrictive assumptions to evaluate the contribution of unobservable changes in taste and quality, taking into account differences in elasticities of substitution across product markets. Using highly disaggregated trade data from UN Comtrade, our empirical analysis for the major world exporters (G7 and BRIC countries) reveals the dominant role of non-price factors in explaining the competitive gains of BRIC countries and concurrent decline in the G7 share of world exports.
Keywords: export market share decomposition; non-price competitiveness; real effective exchange rate (search for similar items in EconPapers)
JEL-codes: C43 F12 F14 L15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ind and nep-int
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Journal Article: What drives the market share changes? Price versus non-price factors (2018)
Working Paper: What drives the market share changes? price versus non-price factors (2014)
Working Paper: What drives the market share changes?: Price versus non-price factors (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ltv:wpaper:201403
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