New trade theory suggests that improvements in the variety and quality of products may be as important as price competitiveness as an explanation of trade flows. This paper tests this proposition for export volumes for the G7 using relative cumulated investment as a proxy for innovation. Positive results are obtained using new panel cointegration techniques as well as more traditional methodologies.
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Paper provided by University of Exeter, School of Business and Economics in its series Discussion Papers with number
99/17.
Length: 44 pages Date of creation: 1999 Date of revision: Handle: RePEc:fth:exetec:99/17
Contact details of provider: Postal: School of Business and Economics University of Exeter Streatham Court Rennes Drive Exeter EX4 4PU Phone: (01392) 263218 Fax: (01392) 263242 Web page: http://www.exeter.ac.uk/sobe/ More information through EDIRC
Find related papers by JEL classification: F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies F14 - International Economics - - Trade - - - Country and Industry Studies of Trade C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
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