Export Quality and the Dynamics of North–South Competition by Jorge Chami Batista, Yan Liu published by The World Economy (2017).
This paper introduces and applies a new methodology to deal with competition among exporters of vertically differentiated products. The novel methodology is applied to Japanese imports of manufacturing goods at the most detailed level of classification. It is shown that the North lost market share in direct competition with the South in all of the three product segments (low, medium and high), and in every sub‐period from 1988 to 2010, except in the high segment in the 1988–91 sub‐period. Most of the North’s direct loss to the South took place in the low and medium segments. China accounts for most of the South’s direct gains in these two segments, while the rest of the developing countries of Asia accounts for most of these gains in the high segment.
