Achieving Excellence In Exporting Intangible-Intensive Goods: Measuring Economic Performances

Purpose – This paper aims at providing a new point of view in the comparison between the sectoral specialization of Italian firms and that of companies of some emerging countries, both apparently concentrating on so-called traditional sectors. What is argued in this paper is that, even if belonging to the same product category, goods produced by Italian and emerging countries’ firms strongly differs in terms of quality and that the competitive advantage of the Italian companies is mainly based on their capacity of exporting “intangible-intensive goods”. Design/methodology/approach – The study is based on the comparison between Italian and a selected group of emerging countries (Brazil, China, India, Malaysia, Mexico, Thailand and Vietnam) exports of fashion-related goods to the American market by means of a new index, called RUPD (Revealed Unit Price Differential). The index is based on the comparison between the average export prices of Italian and of the selected emerging countries’ fashion goods (at 5-digit level). The RUPD “reveals” ex post how much more a consumer has shown to be willing to pay for a specific good in comparison to another good sold on the same market, belonging to the same category and produced in another country (or group of countries). If the RUPD is calculated using sufficiently disaggregated data (at least at the 4 or 5 digit level) we can hypothesize that such index can actually reflect how different consumers perceive a product in comparison with another one, implicitly considering it as non-homogeneous and non-substitutable. Findings – The analysis of RUPDs between Italy and the selected emerging countries shows that most of Italian fashion goods are sold on the American market at much higher prices. The relative weight of sectors with higher RUPD has been rising over the years, with a growing number of products showing an increasing unit price differential between the Italian and the emerging countries products. Furthermore, many sectors maintain a high RUPD for the whole considered period (2000-2009). This allows us to argue that in these fashion sectors American consumers perceive substantial differences between Italian and emerging countries goods that are primarily intangible. Research limitations/implications – Relevant insights can be drawn by adding to the analysis the evolution of market shares. The final part of the article presents a first exercise in this direction that seems to suggest the interest for further analysis. Practical implications – The analysis carried out in this articles suggests that a way to face the growing competition with emerging actors is not only to move towards high tech sectors. Even if operating in traditional sectors, Italian firms still offer excellence goods appreciated on the international markets. For this scenario to be sustainable in the future, three are the suggested strategies. First of all to continue to invest in R&D and innovation (also and especially in crisis times) in order to maintain high levels of excellence. Secondly, to strengthen their marketing capacities: quality differentials have to be perceived and appreciated by consumers. Thirdly, great importance has to be given to the utilization of the available intellectual property rights protection tools, since intangible-intensive goods are particularly easy to imitate. Originality/value – In these last few years, companies of highly industrialized countries have been seriously threatened by the high competitive pressure coming from firms of new emerging countries. For this reason, many observers suggest to firms in advanced countries to reposition their productions towards high tech sectors. The analysis carried out in this article suggests that a different perspective can originate different results on the basis of which different strategies can and should be pursued in order for firms – even if operating in traditional sectors – to maintain a competitive advantage on the international markets.