Non-price competitiveness factors and export performance: The case of Spain in the context of the Euro area
Ramon Xifré. FUNCAS SIFO. mayo 2017
Monday 5 June 2017, by Carlos San Juan
Empirical evidence suggests that internal non-price/cost factors dominate over strictly price/cost elements in determining the external competitiveness of the five largest EA economies, including Spain. Thus, internal devaluation policies are likely to have only a limited impact on restoring competitiveness compared to those aimed at strengthening capitalization and providing the right incentives for exporters.
Furthermore, Spanish exporters’ survival rates shows that, while early-stage survival is difficult, new trade relationships make a significant contribution to aggregate export growth over time. The large degree of heterogeneity across successful export relationships in Spain should be a key consideration at the time of designing export promotion policies.
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Empirical evidence suggests that internal non-price/cost factors dominate over strictly price/cost elements in determining the external competitiveness of the five largest EA economies, including Spain. Thus, internal devaluation policies are likely to have only a limited impact on restoring competitiveness compared to those aimed at strengthening capitalization and providing the right incentives for exporters.
Furthermore, Spanish exporters’ survival rates shows that, while early-stage survival is difficult, new trade relationships make a significant contribution to aggregate export growth over time. The large degree of heterogeneity across successful export relationships in Spain should be a key consideration at the time of designing export promotion policies.
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