Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204419 
Year of Publication: 
2018
Series/Report no.: 
IFRO Working Paper No. 2018/02
Publisher: 
University of Copenhagen, Department of Food and Resource Economics (IFRO), Copenhagen
Abstract: 
China's global export share has increased dramatically over the past decades. This development has prompted an empirical literature on whether Chinese exports displace those originated from elsewhere in various destination markets. In this paper we focus on the growth of China's exports to the East African Community (EAC) countries and show how it has affected exports from the European Union (EU) to the EAC. Our main contribution to the literature on the displacement effect of Chinese exports is a set of total and relative displacement estimates based on different specifications of the gravity model where we control for country-year fixed effects so as to avoid the "gold medal mistake" of not accounting for time varying "multilateral resistance". Our findings do not support the hypothesis that Chinese exports have displaced exports from other countries in general. Nor do they support the hypothesis that Chinese exports have displaced exports from EU countries to the EAC countries or elsewhere. There has been no displacement in the sense that, although exporters from the EU and elsewhere have lost market share to China, the value of their exports to the EAC and elsewhere have still increased.
Subjects: 
habits
trade
gravity equation
export displacement
China
East African Community
European Union
JEL: 
F13
F14
F15
Document Type: 
Working Paper

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