Technological catching up, quality of exports and competitiveness: a sectoral perspective

Eleonora Cavallaro (), Piero Esposito, Alessia Matano and Marcella Mulino ()

No 158, Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma

Abstract: In the paper we focus on emerging market economies' pattern of trade, with a view to explaining the different features of competitiveness for high skill- and low skill-intensive firms. We consider a theoretical dynamical setup where high-skill firms engage in innovation activity and gain market shares in high-income "quality dominated" markets thanks to technological catching up, whereas low-skill firms face price competition for their exports. On the basis of the theoretical model, we run econometric estimations for trade between CEECs and EU economies over the period 2000-2007. In the econometric analysis we first test the assumption that UVR is an adequate indicator of quality in trade, showing that in high skill-intensive firms it is systematically correlated to domestic and foreign technological variables; we then use the fitted UVR in the estimation of the role of preference for quality in the evolution of CEECs' market shares. The estimations support the results of the theoretical model as to the role of non-price competitiveness stemming from quality-supply as well as quality-demand factors.

Keywords: Vertical innovation; Knowledge spillovers; Product quality; International competitiveness. (search for similar items in EconPapers)
JEL-codes: F12 F14 F15 O32 (search for similar items in EconPapers)
Pages: 35
Date: 2012-11
New Economics Papers: this item is included in nep-cse, nep-ino and nep-int
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Citations: View citations in EconPapers (2)

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Journal Article: Technological Catching Up, Quality of Exports, and Competitiveness: A Sectoral Perspective (2013)
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