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International Competitiveness

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  • Fagerberg, Jan

Abstract

This paper develops and tests a model of differing trends in international competi tiveness and economic growth across countries. The model relates the development of market shares at home and abroad to the three sets of factors: the ability to compete in technology, the ability to compete in delivery (capacity), and the ability to compete in price. The tes t, using data for fifteen OECD countries for the period 1961-83, show s that, in the medium and long run, factors related to technology and capacity are very important for market shares and growth, while pric e or cost competitiveness plays a more limited role than often assume d. These results are shown to be consistent with earlier findings by Kaldor and others of a "perverse" (positive) relation between export performance and growth in relative prices or costs. Copyright 1988 by Royal Economic Society.

Suggested Citation

  • Fagerberg, Jan, 1988. "International Competitiveness," Economic Journal, Royal Economic Society, vol. 98(391), pages 355-374, June.
    • Handle: RePEc:ecj:econjl:v:98:y:1988:i:391:p:355-74
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    1. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    2. Fagerberg, Jan, 1987. "A technology gap approach to why growth rates differ," Research Policy, Elsevier, vol. 16(2-4), pages 87-99, August.
    3. Ã…dne Cappelen & Nils Petter Gleditsch & Olav Bjerkholt, 1984. "Military Spending and Economic Growth in the OECD Countries," Journal of Peace Research, Peace Research Institute Oslo, vol. 21(4), pages 361-373, December.
    4. Nerlove, Marc, 1971. "Further Evidence on the Estimation of Dynamic Economic Relations from a Time Series of Cross Sections," Econometrica, Econometric Society, vol. 39(2), pages 359-382, March.
    5. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-125, May.
    6. Kellman, M, 1983. "Relative Prices and International Competitiveness: An Empirical Investigation," Empirical Economics, Springer, vol. 8(3-4), pages 125-138.
    7. Maddala, G S, 1971. "The Use of Variance Components Models in Pooling Cross Section and Time Series Data," Econometrica, Econometric Society, vol. 39(2), pages 341-358, March.
    8. Smith, R P, 1977. "Military Expenditure and Capitalism," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 1(1), pages 61-76, March.
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