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Technology Gap Approach To A Dynamic Change In World Machine Tool Markets: A Panel Data Analysis

Author

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  • Kong-Rae Lee
  • Joong-Hae Suh

Abstract

This paper applies the technology-gap trade theory to explaining radical changes in the competitive positions of countries in world machine tool markets over the last three decades. It develops the notion that the innovation gaps in machine tools among countries led to the intercountry differences in the competitive performance in the sector as well as in its user sectors. Since competitive advantage largely depends on a capability to improve, create and apply technology to market competition, a higher innovative performance in one country than another is closely related to a higher export performance. A higher innovative performance in machine tools is also associated with a higher competitive performance of the large areas of its user sectors, due to sectoral interdependences and externalities generated by machine tool innovations. The results of empirical investigation through a panel data analysis show that the international gaps in machine tool innovations appeared to have a positive significant relationship with the differences in the export performance of both the machine tool sector and its user sector across countries.

Suggested Citation

  • Kong-Rae Lee & Joong-Hae Suh, 1998. "Technology Gap Approach To A Dynamic Change In World Machine Tool Markets: A Panel Data Analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(3), pages 203-220.
    • Handle: RePEc:taf:ecinnt:v:7:y:1998:i:3:p:203-220
    DOI: 10.1080/10438599800000034
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    References listed on IDEAS

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    1. Paul Krugman, 1986. "Strategic Trade Policy and the New International Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610450, April.
    2. Martin Fransman, 1986. "Machinery in Economic Development," Palgrave Macmillan Books, in: Martin Fransman (ed.), Machinery and Economic Development, chapter 1, pages 1-53, Palgrave Macmillan.
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    More about this item

    Keywords

    Technology gap; Machine tools; Competitiveness; Innovativeness; Sectoral interdependence; Dynamic fixed effect; Panel data analysis; User sector; Cross-country analysis JEL Classification: L64; 033; C33;
    All these keywords.

    JEL classification:

    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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