Invited articleThe price and income elasticities of the top clothing exporters: Evidence from a panel data analysis

- We study the main export function features of 12 top clothing exporters.
- 12 Panel datasets of 37 goods each are built and analysed over the period 1992-2011.
- Rolling regressions show some elasticities instability over time related to deep economic and institutional changes.
- Hong Kong and most advanced countries have become organizational hubs.
- China confirms its leading position but with a strong increase in price elasticity.

This paper studies the main export function features of twelve top clothing exporters (China, Hong Kong, France, Germany, India, Indonesia, Italy, Netherlands, Spain, Turkey, UK and USA) in the period between 1992 and 2011. Price and income elasticities are estimated for each economy using a panel data approach, after controlling for nonstationarity, cointegration and Granger causality. Rolling regressions are also performed, and show the existence of some elasticities instability over time, fundamentally related to the profound economic and institutional changes affecting the clothing trade in the period under consideration. The analysis suggests that most advanced economies, including Hong Kong, changed their position in the global value chain towards an “organizational” role. China confirms its leadership in clothing exports although its rising price elasticity sounds a warning with regard to future prospects.