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The Importance of Technology Based Inter-sectoral Linkages for Market Share Dynamics

  • Keld Laursen
  • Valentina Meliciani

This paper introduces inter-sectoral technology-based linkages (or technological spillovers) in a empirical model of international market share dynamics. The Pavitt taxonomy is applied as a yardstick for interpreting the empirical results. In accordance with the criteria behind the taxonomy, we find upstream linkages to be more important for the determination of market shares in scale intensive and supplier dominated sectors, while downstream linkages are particularly important for specialised suppliers. We also find investment to be more important for scale intensive types of sectors, formal R&D for science based sectors, and costs for supplier dominated sectors. The results highlight that the relative importance of different sources of competitiveness differs across sectors and thus reconcile the differences in emphasis in relation to the role of technology in determining trade flows, between (a) a tradition that stresses the importance of knowledge developed in a particular sector, and (b) the so-called ‘home market hypothesis’, that points out how inter-sectoral linkages within a particular country determine trade flows from that country.

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Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 99-10.

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Date of creation: 1999
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Handle: RePEc:aal:abbswp:99-10
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  1. Danny Quah, 1993. "Exploiting Cross Section Variation for Unit Root Inference in Dynamic Data," FMG Discussion Papers dp171, Financial Markets Group.
  2. Keld Laursen & Ina Drejer, 1997. "Do Inter-sectoral Linkages Matter for International Export Specialisation?," DRUID Working Papers 97-15, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  3. Laursen, Keld, 1996. "Horizontal diversification in the Danish national system of innovation: the case of pharmaceuticals," Research Policy, Elsevier, vol. 25(7), pages 1121-1137, October.
  4. Greenhalgh, Christine & Taylor, Paul & Wilson, Rob, 1994. "Innovation and Export Volumes and Prices--A Disaggregated Study," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 102-35, January.
  5. Giovanni Amendola & Giovanni Dosi & Erasmo Papagni, 1993. "The dynamics of international competitiveness," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 129(3), pages 451-471, September.
  6. Nicolai J. Foss, 1996. "Firms, Incomplete Contracts and Organizational Learning," DRUID Working Papers 96-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  7. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
  8. Peter Maskell, 1996. "Localised Low-tech Learning in the Furniture Industry," DRUID Working Papers 96-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  9. Klevorick, Alvin K. & Levin, Richard C. & Nelson, Richard R. & Winter, Sidney G., 1995. "On the sources and significance of interindustry differences in technological opportunities," Research Policy, Elsevier, vol. 24(2), pages 185-205, March.
  10. Breusch, Trevor S & Wickens, Michael R., 1987. "Dynamic Specification, the Long Run and the Estimation of Transformed Regression Models," CEPR Discussion Papers 154, C.E.P.R. Discussion Papers.
  11. Giovannetti, Giorgia & Samiei, Hossein, 1996. "Hysteresis in Exports," CEPR Discussion Papers 1352, C.E.P.R. Discussion Papers.
  12. Carlin, Wendy & Glyn, Andrew & Van Reenen, John, 2001. "Export Market Performance of OECD Countries: An Empirical Examination of the Role of Cost Competitiveness," Economic Journal, Royal Economic Society, vol. 111(468), pages 128-62, January.
  13. Bart Verspagen & Katharine Wakelin, 1997. "Trade and Technology from a Schumpeterian Perspective," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(2), pages 181-194.
  14. Antoine Magnier & Joël Toujas-Bernate, 1994. "Technology and trade: Empirical evidences for the major five industrialized countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 130(3), pages 494-520, September.
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