Dear Colleague,

We cordially invite you to the wiiw-FIW-Seminar in International Economics on

Monday, 12 June 2017, 3.00 – 4.30 pm
wiiw, Rahlgasse 3, 1060 Vienna

Vertical and Horizontal Dynamics in Export Unit Values

Konstantin Wacker
University of Mainz (JGU), Germany

The presentation is based on a paper co-authored with Jan Trenczek (University of Mainz).

Abstract
In this paper, we look at patterns of vertical (‘within-product’) vs. horizontal (‘between’ products) export specialisation using unit values on the 6-digit level.

We start by documenting widespread convergence in products’ unit values as a proxy for export quality. The robustness of this result raises the question why countries do not converge in income levels. We then document that products usually exported by developing countries have shorter quality ladders. This limits the scope for vertical specialization and catch-up, and suggests that vertical specialization can only be one aspect of countries’ upgrading strategy that has to be complemented by horizontal upgrading across goods and sectors.

Against this background, we analyse countries’ vertical vs. horizontal specialization dynamics from the mid-1990s until 2007. Our main contribution in this regard is a methodological decomposition of countries' aggregate export unit values into vertical upgrading and horizontal sector dynamics, reflecting that countries can either upgrade each product in their export portfolio, or they can increasingly move towards sectors with higher unit value perspectives. We then apply this decomposition to trends in aggregate unit values of 154 countries. Although both dimensions are important in countries’ dynamic export pattern, the latter seems to be quantitatively dominating, with entry and exit of products playing an important role as well.

Keywords: Unit value, convergence, structural change in exports

JEL Codes: F14, F43

We kindly ask you to register for the event. Participation is free of charge.

This seminar series is an activity in the framework of FIW ('Forschungsschwerpunkt Internationale Wirtschaft'), which is a project designed to build a center of excellence in research on International Economics, funded by the Austrian Ministry of Science, Research and Economy (BMWFW).

The seminar programme is regularly updated. Please visit the wiiw or FIW website for the current version of the programme. Papers and presentation slides, as far as available, are posted on our webpage after the respective seminars.
 

Best regards,
Julia Grübler
Organizer

Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw)
The Vienna Institute for International Economic Studies
Rahlgasse 3, A-1060 Wien

T: +43 1 533 66 10
F: +43 1 533 66 10 - 50
http://www.wiiw.ac.at/

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