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Competitiveness and the Kaldor Paradox: The case of Spanish Service Sector

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  • Andrés Maroto Sanchez
  • Luis Rubalcaba Bermejo

Abstract

In the current wave of service globalisation, a new dynamic explaining international trade in services emerges. Some services are following similar trends to the ones initiated by manufacturing industries some decades ago. In this context, costs factors, the ones leading the major part of the current global sourcing in services, could gain importance in global services competition. Services could behave more similarly to goods and the Kaldor paradox may potentially be less remarkable that some years ago, in a context where the achievement of the EMU perform in the opposite way. As a particular empirical case study, empirical analysis of trade market shares in relation to effective real exchange rate is carried out for the Spanish case. Results shows that the Kaldor paradox continues having a strong importance in Spanish trade, although not all the service sectors have the same price/costs sensibility. Recent trends also present uneven results depending on the service sector, but in general there are not signs of decreasing the role of non-price/cost factors in international trade (in particular business services), although many services continue to be slightly more sensitive to relative prices than other industries.

Suggested Citation

  • Andrés Maroto Sanchez & Luis Rubalcaba Bermejo, 2006. "Competitiveness and the Kaldor Paradox: The case of Spanish Service Sector," Working Papers 06/06, Instituto Universitario de Análisis Económico y Social.
    • Handle: RePEc:uae:wpaper:0606
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    File URL: http://www3.uah.es/iaes/publicaciones/DT_06_06.pdf
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    References listed on IDEAS

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    1. Grodzicki, Maciej J. & Skrzypek, Jurand, 2020. "Cost-competitiveness and structural change in value chains – vertically-integrated analysis of the European automotive sector," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 276-287.
    2. Martin Gächter & Hanno Lorenz & Paul Ramskogler & Maria Antoinette Silgoner, 2013. "An Export-Based Measure of Competitiveness," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 75-92.

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