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On the extent of export product differentiation : Evidence from, China, Japan, and Korea

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Frame of Image ········································································ 1 Ⅰ. Introduction ································································································ 5 Ⅱ. Rauch’s Classification: Differentiated vs. Homogeneous ············· 11 Ⅲ. Elasticity of Substitution Approach ···················································· 19
1. Theoretical Model ······················································································ 19 2. Data ············································································································ 26 3. Estimation Results ···················································································· 27
Ⅳ. Conclusions ······························································································ 33 References ········································································································· 34 Appendix ··········································································································· 37
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Table Contents
Table 1. The Average Values in Share Ratios ············································ 14 Table 2. Estimated Elasticity of Substitution(1984~2000) ······················· 27 Table 3. Estimated Elasticity of Substitution(1994~2004) ······················· 28
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Figure Contents
Figure 1. China Export Products(Conservative Base) ································· 12 Figure 2. Japan Export Products(Conservative Base) ·········


Full Text
Title On the extent of export product differentiation
Similar Titles
Sub Title

Evidence from, China, Japan, and Korea

Material Type Reports
Author(English)

Kang, Kichun

Publisher

Korea Institute for Industrial Economics and Trade

Date 2006-12
Pages 41
Subject Country China(Asia and Pacific)
Japan(Asia and Pacific)
South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Trade
Industry and Technology < General

Abstract

Many international trade theories and evidence suggest that the trades of homogeneous and differentiated goods are different, and that trade performance depends significantly on the degree of product differentiation. First, this paper classifies the three countries’ export products using Rauch(1999)’s classification scheme. This paper suggests a technique to identify the extent
of product differentiation in a country’s exports, implied by the Dixit and Stiglitz(1977) model in which the smaller is the elasticity of substitution between product varieties the greater is the extent of product differentiation. This is the first attempt to identify the extent of product differentiation in each country’s export basket by estimates of the elasticity of substitution. The estimated elasticities of substitution vary across countries. The most interesting empirical finding is that China’s export structure has been rapidly shaped into differentiated products, which may have played an important role in China’s export success. (The rest omitted)