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.
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Volume (Year): 98 (1988)
Issue (Month): 391 (June)
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- 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 111-25, May.
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