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New Evidence on Export Price Elasticity from China and Six OECD Countries
Author(s) -
Aiello Francesco,
Bonanno Graziella,
Via Alessia
Publication year - 2015
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/cwe.12136
Subject(s) - economics , china , price elasticity of demand , short run , income elasticity of demand , elasticity (physics) , international economics , panel data , structural break , monetary economics , econometrics , international trade , microeconomics , geography , materials science , archaeology , composite material
This paper provides new evidence on export price elasticities by analyzing the cases of China, France, Germany, Italy, Japan, UK and the USA over the period 1990–2012. Estimates have been made using panel data techniques for non‐stationary data. After demonstrating that long‐run relationships are stable to any structural break, it is found that exports are significantly determined by foreign demand, with long‐run income elasticity significantly higher than unity for China, Japan, Germany, the UK and the USA. Conversely, exports are price inelastic for most of the countries in the sample, in both the long run and the short run. The exception is France, whose export price elasticity is lower (higher) than unity in the short run (long run).