IDEAS home Printed from https://ideas.repec.org/p/cri/cespri/wp113.html
   My bibliography  Save this paper

Import Demand with Product Differentiation: Disaggregated Estimation of Italian Sectoral Elasticities

Author

Abstract

This paper estimates sectoral demand functions for Italian imports from European Union countries, Japan, Canada and United States. Evidence of two-way flows and product differentiation is an accepted regularity of international trade. We have tried to include considerations of differentiation in the analysis. Starting from very disaggregated bilateral trade data (5 digit Sitc Rev. 3) we have classified each flow as homogeneous, quality differentiated or non-quality differentiated. Then we have used this classification in the estimate of sectoral import functions. That should increase precision, because avoids pooling homogeneous and differentiated goods in estimation. Our results suggest a very dynamic reaction of Italian imports in many sectors, pointing to possible competitive problems for firms and trade balance constraint for the country.

Suggested Citation

  • Stefano Chiarlone, 2000. "Import Demand with Product Differentiation: Disaggregated Estimation of Italian Sectoral Elasticities," KITeS Working Papers 113, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2000.
    • Handle: RePEc:cri:cespri:wp113
    as

    Download full text from publisher

    File URL: ftp://ftp.unibocconi.it/pub/RePEc/cri/papers/wp113.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Khan, Mohsm S. & Ross, Knud Z., 1977. "The functional form of the aggregate import demand equation," Journal of International Economics, Elsevier, vol. 7(2), pages 149-160, May.
    2. Morris Goldstein & Mohsin S. Khan, 2017. "Income and Price Effects in Foreign Trade," World Scientific Book Chapters, in: TRADE CURRENCIES AND FINANCE, chapter 1, pages 3-81, World Scientific Publishing Co. Pte. Ltd..
    3. Thursby, Jerry G & Thursby, Marie C, 1984. "How Reliable Are Simple, Single Equation Specifications of Import Demand?," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 120-128, February.
    4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    5. David Greenaway & Robert Hine & Chris Milner, 1994. "Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 77-100, March.
    6. Greenaway, David & Torstensson, Johan, 2000. "Economic Geography, Comparative Advantage and Trade within Industries: Evidence from the OECD," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 15, pages 260-280.
    7. Peter Hooper & Karen H. Johnson & Jaime R. Marquez, 1998. "Trade elasticities for G-7 countries," International Finance Discussion Papers 609, Board of Governors of the Federal Reserve System (U.S.).
    8. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    9. Lancaster, Kelvin, 1980. "Intra-industry trade under perfect monopolistic competition," Journal of International Economics, Elsevier, vol. 10(2), pages 151-175, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alberto Bagnai & Christian Alexander Mongeau Ospina, 2014. "The a/simmetrie annual macroeconometric model of the Italian economy: structure and properties," a/ Working Papers Series 1405, Italian Association for the Study of Economic Asymmetries, Rome (Italy).
    2. Bel Hadj Tarek, 2012. "Product Differentiation and Intra-Industrial Trade: Quantitative Assessment in the Case of Tunisia," Journal of Economics and Behavioral Studies, AMH International, vol. 4(10), pages 570-587.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stefano Chiarlone, 2000. "Trade of quality differentiated goods and import elasticities," LIUC Papers in Economics 72, Cattaneo University (LIUC).
    2. Lionel Fontagné & Michael Frudenberg & Nicolas Péridy, 1998. "Commerce international et structures de marché : une vérification empirique," Économie et Prévision, Programme National Persée, vol. 135(4), pages 147-167.
    3. J. Hanna & L. L鶩 & S. Petit, 2015. "Intra-tourism trade, income distribution and tourism endowment: an econometric investigation," Applied Economics, Taylor & Francis Journals, vol. 47(21), pages 2184-2200, May.
    4. Ando, Mitsuyo, 2006. "Fragmentation and vertical intra-industry trade in East Asia," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 257-281, December.
    5. Aggarwal, Sakshi & Chakraborty, Debashis, 2017. "Determinants of India’s Bilateral Intra-Industry Trade over 2001-15: Empirical Results," MPRA Paper 78020, University Library of Munich, Germany.
    6. Michaël Freudenberg & Françoise Lemoine, 1999. "Central and Eastern European Countries in the International Division of Labour in Europe," Working Papers 1999-05, CEPII research center.
    7. Ray Barrell & Dirk Willem te Velde, 2002. "European Integration and Manufactures Import Demand: An Empirical Investigation of Ten European Countries," German Economic Review, Verein für Socialpolitik, vol. 3(3), pages 263-293, August.
    8. Carone, Giuseppe, 1996. "Modeling the U.S. demand for imports through cointegration and error correction," Journal of Policy Modeling, Elsevier, vol. 18(1), pages 1-48, February.
    9. Michael Freudenberg & Harald Trabold, 1999. "Vertikale Produktdifferenzierung im Außenhandel: Theoretische Grundlagen und empirischer Befund," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 68(3), pages 356-385.
    10. Chang, Byoung-Ky, 1999. "Three essays on imperfect competition and exchange rate pass-through in the presence of multiple exchange rates," ISU General Staff Papers 1999010108000013554, Iowa State University, Department of Economics.
    11. AZHAR, Abdul K.M. & Elliott, Robert J.R. & Liu, Junting, 2008. "On the measurement of product quality in intra-industry trade: An empirical test for China," China Economic Review, Elsevier, vol. 19(2), pages 336-344, June.
    12. Patryk Emanuel TOPOROWSKI, 2017. "Did the economic crisis change V4 trade patterns? The case of intra-industry trade," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8, pages 71-93, December.
    13. Lionel Fontagné & Michaël Freudenberg & Deniz Ünal, 1995. "Régionalisation et échanges de biens intermédiaires," Working Papers 1995-11, CEPII research center.
    14. Jaime R. Marquez, 1995. "A century of trade elasticities for Canada, Japan, and the United States," International Finance Discussion Papers 531, Board of Governors of the Federal Reserve System (U.S.).
    15. Georgy Idrisov, 2010. "Factors of Demand for Imported Goods for Investment Purpose to Russia," Research Paper Series, Gaidar Institute for Economic Policy, issue 138P.
    16. Sawyer, W. Charles & Sprinkle, Richard L., 1997. "The Demand for Imports and Exports in Japan: A Survey," Journal of the Japanese and International Economies, Elsevier, vol. 11(2), pages 247-259, June.
    17. L. G. Burange & Hemangi K. Kelkar, 2019. "Product Quality Index: A New Way to Classify Intra-industry Trade," Foreign Trade Review, , vol. 54(4), pages 408-421, November.
    18. Robert Kelm, 2016. "Eksport, import i kurs złotego: 2000−2014," Bank i Kredyt, Narodowy Bank Polski, vol. 47(6), pages 585-620.
    19. Young, Trevor, 1991. "The Theoretical and Empirical Analysis of Agricultural Trade of LDCs," Manchester Working Papers in Agricultural Economics 232830, University of Manchester, School of Economics, Agricultural Economics Department.
    20. Amadeo Navarro Zapata & María Arrazola & José Hevia, 2023. "Technological intensity in manufacturing trade between ASEAN and the EU: challenges and opportunities," Asia Europe Journal, Springer, vol. 21(1), pages 23-42, March.

    More about this item

    Keywords

    Sectoral import demand; Quality and horizontal differentiation; Italian trade; Sectoral price and income elasticity;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cri:cespri:wp113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valerio Sterzi (email available below). General contact details of provider: http://www.kites.unibocconi.it/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.