2014/10 | LEM Working Paper Series | |
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Technology and costs in international competitiveness: from countries and sectors to firms
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Giovanni Dosi, Marco Grazzi, Daniele Moschella |
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Keywords | ||
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Trade Competitiveness, Technological Innovation, Input Costs, Firm behaviour, Technology Gap Theories of Trade
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JEL Classifications | ||
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D22, F10, F14, F19, L25, O32
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Abstract | ||
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This paper examines the determinants of international competitiveness
at the level of sectors and firms. First, we address the relation
between cost-related and technological competition in a sample of
fifteen OECD countries. Results suggest that the countries’ sectoral
market shares are indeed mainly shaped by technological factors
(proxied by investment intensity and patents) while cost
advantages/disadvantages do not seem to be play any significant
role. Next, we attempt to identify the underlying dynamics at the firm
level. We do that for a single country, Italy, using a large panel of
Italian firms, over nearly two decades. Results show that also at
micro level in most sectors investments and patents correlate
positively both with the probability of being an exporter and with the
capacity to acquire and to increase export market shares. The evidence
on costs is more mixed. A simple measure like total labour
compensation is positively correlated with the probability of being an
exporter, while unit labour costs show a negative correlation only in
some manufacturing sectors.
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