DETECTING VERTICAL INTRA-INDUSTRY TRADE IN CULTURAL PRODUCTS

The European integration process has always since markedly characterized by the increasing incidence of Intra-Industry Trade. This has been theoretically justified on the grounds of the new approaches emerging in international trade literature, based on imperfect competition and differentiated products. In recent years another distinctive economic feature of European Union is the importance gained by the so called “cultural and creative sectorsâ€, which are often studied and monitored by reports for their great growth potential. We provide here a systematic decomposition of world trade in “cultural/creative goods†for the year 2009 (using harmonised bilateral flows for some 213 products defined as “cultural products†by UNESCO, 2009) into three trade types: inter-industry, intra-industry (IIT) in horizontally versus vertically differentiated products. We show that the world trade in cultural goods is significantly characterised by two-way trade of vertically differentiated products. Moreover we specifically focus on the Italian peculiarities in the “cultural tradeâ€: therefore we first work out which ones of the world countries are the “top exporters†of these categories of products and then we compute an indicator of the Italian goods’ quality relative to each of these competitors. Not surprisingly, we find that the most important bilateral IIT intensities in cultural products are observed in Europe. However the presence of developing countries is not unimportant. This can be explained partly to as a consequence of the increasing level of trade integration among some Asian countries and as a consequence of an increasing despecialization of firstly industrialized countries in the production and trading of these products. Finally, with reference to the relative quality of Italian cultural products compared with that of the other top-exporters in these sectors, we find that Italian performance are good relative to those of emerging countries (such as China and India), but not as much if compared to other European countries (such as Germany, France and United Kingdom)

PRICE VS QUALITY COMPETITION AND THE SPATIAL PATTERN OF AVERAGE PRICES IN INTERNATIONAL TRADE

This work investigates the relationship between the average export prices and the distance between the origin and the destination market in international trade. Distance between trading partners obviously stands at the core of I international trade literature and is strictly related with the issue of how countries and firms compete on export markets when transport costs become increasingly stiff. Heterogeneous-Firm Trade (HFT) models predict that only most competitive firms are able to export on distant markets, where it is more difficult to recover from freight costs. However, this simple concept does not lead to unambiguous predictions on the spatial pattern of average export f.o.b. prices. \\\\\\\\\\\\\\\\r\\\\\\\\\\\\\\\\nThis work uses bilateral product-level data for five top-exporters (US, Germany, China, France, Italy) and all their world partners in order to test the main hypotheses derivable on this issue from theoretical literature. An huge dataset of bilateral international trade flows, the BACI dataset of CEPII, provides data both on values and quantities, allowing to construct products’ unit values (at the 6 digit level of the Harmonized System), approximating average exports’ prices. These data are used as the dependent variable of the econometric test and regressed on a set of explanatory variables: the distance of the destination market from the exporter and other importer’s characteristics. Thus, this test assesses which of the considered theoretical models fit the data best, shedding some light both on the sign and on the determinants of the spatial pattern of average prices. The main finding of this work is that theoretical models not embedding a quality dimension for products do not seem to fit the data very well: it is clear from the econometric test that a positive correlation between average exports’ prices and distance often emerges, denoting a “quality competition†pattern in addition to a possible alternative pattern of “price competitionâ€. Moreover, theoretical models with a quasi-linear demand function (in contrast with a CES one) are able to better explain same evidences emerging from the data. \\\\\\\\\\\\\\\\r\\\\\\\\\\\\\\\\

The Performances of Italian Vertical Intra-Industry Trade in Cultural vs ICT Goods

We assess if systematic differences arise in Italian vertical intra-industry trade in ICT and cultural products. We study the factors leading to increasing levels of VIIT since vertical two-way trade flows are prevalent and (in opposition to those of the horizontal type) result in complementary rather than competitive production and trading patterns. We decompose Italian bilateral flows in ICT and cultural goods (2000-2009) into three trade types: inter-industry, horizontal and vertical intra-industry trade, then provide a top-10 list of the Italian partners in terms of percentage of VIIT and finally analyze the Italian performances in terms of products relative quality