Wednesday, September 24, 2008

French Export Performance

Lionel Fontagné and Guillaume Gaulier attempt to explain why French export performance has suffered in comparison with Germany. They find that German and French exporters are highly likely (80% probability) to find themselves in competition for the same markets and that German firms have been more successful in holding down wages and outsourcing the manufacture of components to reduce costs. They note, however, that Germany's better performance has manifested itself only over the past few years, and they do not consider the long-term implications of their findings.

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