Register  |  Login  |  Inquiries  |  Sitemap
Advanced Search
Journal of Economic Integration 2013 June;28(2) :303-326.
Moving up the Quality Ladder? EU-China Dynamics in Clothing
Hylke Vandenbussche
Francesco Di Comite
Laura Rovegno and 
Christian Viegelahn 
IRES-CORE, Université Catholique de Louvain, Louvain-la-Neuve, Belgium
European Commission, Joint Research Centre (JRC), Seville, Spain
Center of Research in Economic Analysis (CREA), University of Luxembourg, Luxembourg
International Labour Organization (ILO), Employment Trends Unit, Geneva, Switzerland
Corresponding Author: Hylke Vandenbussche ,Tel: +32 010474137, Fax: +32 010473945, Email:
Copyright ©2013 Journal of Economic Integration
We apply a simple method to study the relative quality of Chinese versus European products exported in the clothing sector after the end of the Multi-Fiber Arrangement. Based on the model of Foster et al., (2008), we interpret the change in relative export prices and quantities sold in narrowly defined product categories as an indicator of quality shifts. Using UN Comtrade data, we find that European varieties exported to the US typically sell for a higher price than identical Chinese varieties exported to the US, but this price gap is narrowing. Despite rising prices, Chinese varieties are gaining market share. This opposite movement of relative prices and quantities sold in the same destination market are a strong indication of China’s moving up the quality ladder in its clothing exports relative to the EU. While European core products in clothing are stable over time, Chinese exports show product dynamics with exit and entry of new core products every year.

JEL Classification
F12: Models of Trade with Imperfect Competition and Scale Economies
F13: Trade Policy; International Trade Organizations
F14: Empirical Studies of Trade
Keywords: Trade | Quality upgrading | Import competition | Product dynamics
1. Armington, P. (1969), “A Theory of Demand for Products Distinguished by Place of Production”, International Monetary Fund Staff Papers, XVI (1969), 159-78.
2. Baldwin, R. and Harrigan, J. (2011). “Zeros, quality, and space: Trade theory and trade evidence.” American Economic Journal: Microeconomics 3, 60-88.
3. Di Comite, F., Thisse, J.-F. and Vandenbussche, H. (2011). “Verti-zontal differentiation in monopolistic competition”, National Bank of Belgium Working Paper.
4. European Commission (2007). “Textiles, wearing apparel and leather products sector: Comprehensive sectoral analysis of emerging competences and economic activities in the European Union”, Report for the European Commission, DG Employment, Social Affairs and Equal Opportunities.
5. Evans, Carolyn and James Harrigan. (2005). “Tight Clothing. How the Mfa Affects Asian Apparel Exports,” Ito, T. and A. K. Rose, International Trade in East Asia, Nber-East Asia Seminar on Economics. University of Chicago Press, 367-90.
6. Fajgelbaum, Pablo, Gene M. Grossman and Elhanan Helpman (2011),” Income Distribution, Product Quality and International Trade” Journal of Political Economy, vol. 119, August.
7. Finger, J. M. and M. E. Kreinin.(1979). “A Measure of `Export Similarity’ and Its Possible Uses.” The Economic Journal, 89(356), 905-12.
8. Francois, Joseph and Julia Woerz. (2009). “Non-Linear Panel Estimation of Import Quotas: The Evolution of Quota Premiums under the Atc.” Journal of International Economics, 78(2), 181-91.
9. Foster, Lucia; John Haltiwanger and Chad Syverson.(2008). “Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?” American Economic Review, 98(1), 394-425.
10. Hummels, David and Peter Klenow, (2005), “The Variety and Quality of a Nation’s Exports,” American Economic Review, 2005, 95 (3), 704-723
11. Latzer, Hélène and Florian Mayneris (2011),”Trade in quality and income distribution”, working paper, Université Catholique de Louvain.
12. Linder (1961).“An Essay on Trade and Transformation”, Almqvist & Wiksell, Stockholm.
13. Melitz, M. J. and Ottaviano, G. I. P. (2008). Market size, trade, and productivity. Review of Economic Studies, 75: 295-316.
14. G. Mion, H. Vandenbussche and L. Zhu (2010), “Trade with China and Skill-upgrading. Evidence from Belgian firm-level data”, National Bank of Belgium Working Paper, 2010-194.
15. Nordås, Hildegunn Kyvik (2004). “The Global Textile and Clothing Industry Post the Agreement on Textiles and Clothing “ World Trade Organization Discussion Paper No. 5.
16. Schott, Peter K. (2008). “The Relative Sophistication of Chinese Exports.” Economic Policy, 23(53), 5-49.
PDF Links  PDF Links
Full text via DOI  Full text via DOI
Download Citation  Download Citation
Supplement  Supplement
Fertility, the Quality of Children and Economic Growth  1998 June;13(2)
Editorial Office
Center for Economic Integration, Sejong Institution, Sejong University, 209, Neungdong-Ro, Gwangjin-Gu,
Seoul, 05006, Korea
TEL : +82-2-3408-3338    FAX : +82-2-3408-3338   E-mail :
Browse Articles |  Current Issue |  For Authors and Reviewers |  About
Copyright© by Center for Economic Integration. All right reserved.