New phenomena in the price movement of manufactured goods in contemporary international trade

Abstract

Purpose: The purpose of the article is to identify trends in the movement of processed goods prices in international trade in 2014-2020 and to explain them in the context of structural transformations occurring in the exports’ sector of the countries under study. Design/Methodology/Approach: The research on export price trends was conducted based on the export price indices of processed goods and indices of manufacture to manufacture terms of trade. Then, the analysis of changes in the structure of exports of processed goods by the degree of processing of the countries and groups of countries studied was made. Findings: The results indicate the existence of relatively high dynamics of export prices of processed goods of China and India, i.e., developing countries, so far competing with low prices in exports. This phenomenon occurred under the conditions of an apparent increase in the share of high-skill and technology-intensive manufactures in the total exports of these countries in the last quarter of a century, as shown in the study. Practical Implications: The results of this research have important implications for economic policy-making in developing countries. They confirm that goods characteristics (export structure) are still an important determinant of export prices. Originality/Value: The present study demonstrates new phenomena in the price movement of manufactured goods in international trade that deviate from previous trends analyzed and reported in the literature. The findings contribute to the ongoing discussion on the increasing technological sophistication of developing countries' exports improving their terms of trade.