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Evaluation of Non-price Competitiveness of Exports from Central, Eastern and Southeastern European Countries in the EU Market

Author

Listed:
  • Konstantins Benkovskis

    (Bank of Latvia)

  • Julia Woerz

Abstract

We propose an export price indicator adjusted for non-price factors as a measure of a country's competitiveness. Based on the approach by Broda and Weinstein (2006) who adjust price developments for changes in varieties of imported products, we relax their assumption of unchanged quality over time and apply this index to export prices of the ten CESEE EU Member States which acceded in 2004 and 2007. The index is calculated using data from Comext at the highly disaggregated eight-digit CN product level. Our analysis spans the time period from 1999 to 2010, thus including the recent global recession in 2009. The results show that all CESEE10 countries experienced loss in price competitiveness, although much smaller than is usually suggested by the traditional CPI-based or ULC-based real effective exchange rate measures. Although relative export prices (unit values) increased stronger in CESEE10 countries as compared with their competitors, the average quality of their goods increased even more, thus fully compensating for the rise in prices. These improvements in non-price competitiveness were pronounced in all CESEE10 countries.

Suggested Citation

  • Konstantins Benkovskis & Julia Woerz, 2012. "Evaluation of Non-price Competitiveness of Exports from Central, Eastern and Southeastern European Countries in the EU Market," Working Papers 2012/01, Latvijas Banka.
    • Handle: RePEc:ltv:wpaper:201201
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    References listed on IDEAS

    as
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    Cited by:

    1. Xifré, Ramon, 2014. "The Competitiveness of the Spanish Economy -- A Bird's-eye View on the Four Largest Euro Area Economies," IESE Research Papers D/1088, IESE Business School.
    2. Konstantins Benkovskis & Julia Wörz, 2016. "Non-price competitiveness of exports from emerging countries," Empirical Economics, Springer, vol. 51(2), pages 707-735, September.
    3. repec:lic:licosd:33413 is not listed on IDEAS
    4. Lucian Claudiu ANGHEL & Florina PINZARU & Mihaela DINU & Laurentiu-Mihai TREAPAT, 2014. "Fixing the Central Parity and the Evolution of the Currency within the Exchange Rate Mechanism II in the Countries that Joined the Euro Zone," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 2(4), pages 21-40, April.
    5. Lucian Claudiu ANGHEL & Florina PÎNZARU & Mihaela DINU, 2014. "Aspects Regarding The Evolution Of Nominal And Real Convergenge Before And After Adhesion To Euro Zone," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 14, pages 151-161, December.
    6. Lucian Claudiu ANGHEL & Florina PÎNZARU & Laurentiu-Mihai TREAPAT, 2014. "The Evaluation of the Equilibrum Exchange Rate based on the Purchase Power, for Romania’s Case," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(16), pages 124-130, December.
    7. Lucian Claudiu ANGHEL & Laurentiu-Mihai TREAPAT, 2015. "Main Economic Policies in order to Manage an Optimum Accession of Romania to the Euro Zone," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 3(1), pages 151-169, March.
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    9. Konstantīns Beņkovskis, 2012. "Competitiveness of Latvia's exporters," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 12(2), pages 17-45, December.
    10. Konstantīns Beņkovskis & Julia Wörz, 2015. "Summary Measure for Price and Non-price Competitiveness for ASEAN+3," Asian Economic Journal, East Asian Economic Association, vol. 29(2), pages 165-180, June.

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    More about this item

    Keywords

    non-price competitiveness; quality; relative export price;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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