The purpose of this paper is to first examine changes in technological and trade competitiveness and explore the relationship between them in a range of advanced industrialised countries and developing countries. Next, the relationship is analysed between competition and changes in technological and trade competitiveness. The analysis is confined to three advanced industrialised countries, Germany, Japan and the United States and six developing countries, Hong Kong, South Korea, Singapore, Argentina, Brazil and Mexico. In section two the theoretical and empirical literature on trade, technological innovation and competition are briefly examined. Section three discusses the methods and data used to derive indices of competitiveness and the approach adopted to examine the relationship between trade and technological competitiveness. Two indices are calculated, which measure technological and trade comparative advantage to be used as a proxy for competitiveness on a country and an industry basis. A measure of market competition is also derived based on market concentration. Section four analyses the patterns of trade and technological comparative advantage for each country and on an industry basis. Section five examines the relationship between changes in trade and technological competitiveness and the role played by domestic competition. Section six provides an analysis of the relationship between 2 changes in the level of domestic competition and technological and trade competitiveness. The final section draws conclusions.
Manchester, UK, CRC Working Paper, No. 72, 34 pp.