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Abstract:
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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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