The Impact of Technological Opportunity on the Dynamics of Trade Performance

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Abstract

The paper explores firstly the impact of technological change on trade growth at the country level, using trade statistics and statistics on patenting activity in the US, across 20 countries for 17 manufacturing sectors. Secondly, using structural decomposition analysis, the paper examine whether the degree to which countries get access to sectors with above average growth in technological opportunity has any impact on growth in aggregate market shares of exports. The results demonstrate that there is a positive relationship between change in trade performance and change in technological capabilities across countries for 8 ‘technology intensive’ sectors over the period 1965-1988. It is also shown that there appear to be some (however weak) relationship between the degree to which countries get access to sectors with above average growth in technological opportunity and growth in aggregate market shares. However, there seems to be a
much stronger positive relationship between growth rates in trade performance and the individual ‘national innovation system’s’ ability to actively move into technological sectors offering above average technological opportunity.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherDRUID - Danish Research Unit for Industrial Dynamics
Number of pages31
ISBN (Print)8778730120
Publication statusPublished - 1996
Externally publishedYes
SeriesDRUID Working Paper
Number96-12

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