Trade Flows and Trade Specialisation: The Case of China

30 Pages Posted: 10 Mar 2015

See all articles by Guglielmo Maria Caporale

Guglielmo Maria Caporale

Brunel University London - Department of Economics and Finance; London South Bank University; CESifo (Center for Economic Studies and Ifo Institute); German Institute for Economic Research (DIW Berlin)

Anamaria Sova

Bucharest Academy of Economic Studies; CES Sorbonne University

Robert Sova

Bucharest Academy of Economic Studies

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Date Written: February 27, 2015

Abstract

Using annual data for the period 1992-2012, this paper examines trade flows between China and its main trade partners in Asia, North America and Europe, and whether increasing trade has led to industrial structural adjustment and changes in China’s trade patterns. The analysis is based on both economic indicators and the estimation of a gravity model, and applies recently developed panel data methods that explicitly take into account unobserved heterogeneity, specifically the fixed effect vector decomposition (FEVD) technique. The findings confirm the significant change in China’s trading structure associated with the fast growth of foreign trade. In particular, there has been a shift from resource- and labour-intensive to capital- and technology-intensive exports.

Keywords: gravity model, panel data analysis, trade specialisation, comparative advantage

JEL Classification: C23, F14, F15

Suggested Citation

Caporale, Guglielmo Maria and Sova, Anamaria and Sova, Anamaria and Sova, Robert, Trade Flows and Trade Specialisation: The Case of China (February 27, 2015). CESifo Working Paper Series No. 5217, Available at SSRN: https://ssrn.com/abstract=2576156 or http://dx.doi.org/10.2139/ssrn.2576156

Guglielmo Maria Caporale (Contact Author)

Brunel University London - Department of Economics and Finance ( email )

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London South Bank University ( email )

Centre for Monetary and Financial Economics
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United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

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Germany

German Institute for Economic Research (DIW Berlin) ( email )

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Anamaria Sova

Bucharest Academy of Economic Studies

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Bucharest, 010374
Romania

CES Sorbonne University ( email )

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Paris
France

Robert Sova

Bucharest Academy of Economic Studies ( email )

Piata Romana 6
Bucharest
Romania

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