New Trade Theory and Aggregate Export Equations: an Application of Panel Cointegration

Rebecca Driver and Simon Wren-Lewis

Discussion Papers from University of Exeter, Department of Economics

Abstract: 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.

Keywords: INNOVATIONS; INTERNATIONAL TRADE; REGRESSION ANALYSIS (search for similar items in EconPapers)
JEL-codes: C23 F12 F14 (search for similar items in EconPapers)
Pages: 44 pages
Date: 1999
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:9917

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