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Article
Publication date: 21 August 2017

Assem Abu Hatab

A growing number of studies indicate that the export growth of China’s textiles poses serious threats to many developing countries. The purpose of this paper is to…

Abstract

Purpose

A growing number of studies indicate that the export growth of China’s textiles poses serious threats to many developing countries. The purpose of this paper is to empirically measure the extent to which the export growth of Chinese textiles has come at the expense of Egyptian textiles exports in third importing markets.

Design/methodology/approach

To measure this effect, an augmented gravity model equation was estimated using annual data covering the period 1994-2012 on Egyptian and Chinese textile exports to traditional importers of Egyptian textiles.

Findings

The empirical results suggest that Egyptian textiles are vulnerable to competitive threat posed by China, especially in the EU and US markets. In contact, Egyptian textile exports have moved hand-in-hand with Chinese textile exports to Asian markets. Moreover, the results suggest that the expiration of the Multi-fiber Agreement in 2005 has exposed Egyptian textile exports to fierce completion with China and resulted in declines in Egypt’s textile exports to the world. However, the trade agreements that Egypt signed with the world countries have given Egypt a competitive edge in major importing regions and mitigated the negative impacts of China in the post-2005 period. Finally, the paper argues that unless Egypt adjusts and develops its textile sector in response to such heightened competition from China, Egyptian textile exports undoubtedly would further be negatively impacted.

Research limitations/implications

In this study, Egypt’s textile products are aggregated to one group and analyzed as a whole, “textile exports.” Further research using a more disaggregated level of data would offer deeper insights into the impacts of China on Egyptian textile exports.

Originality/value

The contribution of this paper is twofold: first, it adds to the growing literature aiming to understand the impacts of China’s growth on developing countries exports by providing a case study of Egyptian textile export sector. Second, the policy implications drawn from this paper could be useful to Egyptian policy makers and stakeholders to address and respond to the competitiveness challenges posed by China to the Egyptian textile industry.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 7 no. 2
Type: Research Article
ISSN: 2044-0839

Keywords

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Article
Publication date: 29 April 2014

Assem Abu Hatab and Eirik Romstad

The expected growth of China's cotton imports along with Egypt's quest for penetrating new cotton importing markets have together attracted the authors to investigate the…

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Abstract

Purpose

The expected growth of China's cotton imports along with Egypt's quest for penetrating new cotton importing markets have together attracted the authors to investigate the competitiveness and the demand for Egyptian cotton in the Chinese market in order to capture the emerging opportunities that Egypt could gain from such a growing market. The paper aims to discuss these issues

Design/methodology/approach

The paper employs Balassa's index of revealed comparative advantage and Vollrath's indices of revealed competitive advantage in order to measure the competitiveness of Egyptian cotton exports. An Almost Ideal Demand System (AIDS) approach was then used to estimate demand parameters for Chinese cotton imports from Egypt and major supply sources during the period 1992-2011.

Findings

Results show that Egypt has experienced dramatic declines in its cotton comparative advantage over the analyzed period. The estimation results of the AIDS model indicate that Egypt's market share is positively affected by both own and US export prices, but negatively influenced by export prices of other competitors in the Chinese market. Results also indicate that Egyptian cotton is substitutable for cotton imports from all other regions, especially for US cotton. Moreover, additional Chinese expenditure on cotton imports would favor other suppliers. Finally, demand for Egyptian cotton was found to be more sensitive to price changes and there is a greater tendency for China to switch to Egyptian cotton than the other way around should relative prices change.

Originality/value

This paper is original and novel in that; despite numerous studies have been done on China's demand for cotton and the several studies have been carried out on export and marketing of Egypt's cotton, the issue of cotton trade between Egypt and China has rarely been empirically examined. Furthermore, our results update important parameter estimates, particularly import demand elasticities of cotton. For Egypt, the study provides useful policy implications that could help policy makers to improve informed decision making with regard topromoting cotton exports to the Chinese market. For China, the study helps understanding the interrelationship between the Chinese cotton market and other emerging exporting markets, while focusing on the Egyptian market.

Details

China Agricultural Economic Review, vol. 6 no. 2
Type: Research Article
ISSN: 1756-137X

Keywords

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Article
Publication date: 27 July 2012

Assem Reda Abu Hatab, Nada Abdelhamed Shoumann and Huo Xuexi

Bilateral trade between Egypt and China has expanded substantially in recent years. Few studies however have focused on the understanding of this trade relationship. The…

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1957

Abstract

Purpose

Bilateral trade between Egypt and China has expanded substantially in recent years. Few studies however have focused on the understanding of this trade relationship. The purpose of this paper is to fill a void in the literature by examining and understanding the two countries' trade pattern.

Design/methodology/approach

In order to achieve the objectives of the paper, and in the light of the pool of literature and availability of data, the authors relied on qualitative methods to analyze the composition of trade between Egypt and China. In addition, the authors employed trade intensity index, intra‐industry trade index, and examined the trade complementarity to capture the dynamics and perspectives of bilateral trade between the two countries.

Findings

Results show low values in Egypt's trade intensity index, implying that Egyptian trade with China is less than it should be. The low values of the intra‐industry trade index suggest smaller trade between the two countries' firms in the same industry. The study clearly shows that there are few areas where there is an overlap in the two countries' comparative advantage. The trade complementarity analysis tends to suggest that the complementarity for China to export to Egypt is increasing, while that for Egypt to export to China is declining.

Originality/value

Given the lack of research that examines and compares trade between the two countries, the paper provides an in‐depth understanding of the patterns of trade between them and the driving forces behind such dynamics, which is pertinent to best capture the opportunities presented by the Chinese market. Also, the findings can be used to draw policy implications for promoting future trade and cooperation between Egypt and China.

Details

Journal of Economic Studies, vol. 39 no. 3
Type: Research Article
ISSN: 0144-3585

Keywords

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