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Productivity Performance and International Competitiveness: A New Test of an Old Theory

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Author Info
Ehsan U. Choudhri () (Department of Economics, Carleton University)
Lawrence L. Schembri () (Department of Economics, Carleton University)

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Abstract

The paper uses a modern adaptation of the Ricardian model which incorporates monopolistic competition and multiple factors to derive a MacDougall-type relation between a country’s nternational competitiveness at the industry level and its productivity performance. This relation is implemented empirically for Canada and the United States, using panel data for 25 years and 40 industries. A key finding is that Canadian-U.S. productivity ratio is a significant determinant of relative shares of Canadian firms in both Canadian and U.S. markets. Trade liberalization between Canada and the U.S. also plays an important role in influencing market shares.

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File URL: http://www2.carleton.ca/economics/research/working-papers/carleton-economic-papers-cep/1991-2000/
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Publisher Info
Paper provided by Carleton University, Department of Economics in its series Carleton Economic Papers with number 99-02.

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Length: 33 pages
Date of creation: May 1998
Date of revision: Jan 1999
Publication status: Published: Carleton Economic Paper
Handle: RePEc:car:carecp:99-02

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Related research
Keywords: International Competitiveness; Ricardian Model;

Find related papers by JEL classification:
F11 - International Economics - - Trade - - - Neoclassical Models of Trade
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December. [Downloadable!] (restricted)
  2. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December. [Downloadable!] (restricted)
  3. Brecher, Richard A. & Choudhri, Ehsan U. & Schembri, Lawrence L., 1996. "International spillovers of knowledge and sectoral productivity growth: some evidence for Canada and the United States," Journal of International Economics, Elsevier, vol. 40(3-4), pages 299-321, May. [Downloadable!] (restricted)
  4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June. [Downloadable!] (restricted)
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  5. Deardorff, Alan V., 1984. "Testing trade theories and predicting trade flows," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 10, pages 467-517 Elsevier. [Downloadable!] (restricted)
  6. Donald R. Davis & David E. Weinstein, 1998. "An Account of Global Factor Trade," Harvard Institute of Economic Research Working Papers 1849, Harvard - Institute of Economic Research.
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  7. Harrigan, James, 1997. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model," American Economic Review, American Economic Association, vol. 87(4), pages 475-94, September. [Downloadable!] (restricted)
    Other versions:
  8. Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Blackwell Publishing, vol. 43(2), pages 217-35, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dalia Hakura & Ehsan U. Choudhri, . "International Trade in Manufactured Products: A Ricardo-Heckscher-Ohlin Explanation with Monopolistic Competition," IMF Working Papers 01/41, International Monetary Fund. [Downloadable!]
  2. James Harrigan, 2001. "Specialization and the volume of trade: do the data obey the laws?," Staff Reports 140, Federal Reserve Bank of New York. [Downloadable!]
    Other versions:
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