Technology and Costs in International Competitiveness: From Countries and Sectors to Firms

Quaderni - Working Paper DSE N° 941

32 Pages Posted: 7 May 2014

See all articles by Giovanni Dosi

Giovanni Dosi

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM)

Marco Grazzi

Universita' Cattolica del Sacro Cuore

Daniele Moschella

Scuola Superiore Sant'Anna di Pisa

Date Written: May 5, 2014

Abstract

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 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.

Keywords: Trade Competitiveness, Technological Innovation, Input Costs, Firm behaviour, Technology Gap Theories of Trade

JEL Classification: D22, F10, F14, F19, L25, O32

Suggested Citation

Dosi, Giovanni and Grazzi, Marco and Moschella, Daniele, Technology and Costs in International Competitiveness: From Countries and Sectors to Firms (May 5, 2014). Quaderni - Working Paper DSE N° 941, Available at SSRN: https://ssrn.com/abstract=2433451 or http://dx.doi.org/10.2139/ssrn.2433451

Giovanni Dosi (Contact Author)

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM) ( email )

Piazza Martiri della Liberta, 33
Pisa, I-56127
Italy

HOME PAGE: www.lem.sssup.it

Marco Grazzi

Universita' Cattolica del Sacro Cuore ( email )

1 Largo A. Gemelli
Milano (Milan), MI Milano 20123
Italy

Daniele Moschella

Scuola Superiore Sant'Anna di Pisa ( email )

Biblioteca Scuola Superiore Sant'Anna
Piazza Martiri della Liberta, n. 33
Pisa, 56127
Italy

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