C. Greenhalgh et al., INTELLECTUAL PROPERTY, TECHNOLOGICAL ADVANTAGE AND TRADE PERFORMANCE OF UK MANUFACTURING-INDUSTRIES, Applied economics, 28(5), 1996, pp. 509-519
The technological advantage of advanced countries is often cited as a
potential source of comparative advantage in world trade, although wit
h international mobility of capital this may not be sufficient to reta
in domestic production. Net trade volumes for a panel of UK manufactur
ing industries are investigated using two measures of industry-specifi
c technological advantage, one absolute (innovations) and one relative
(patents). It is demonstrated that the determining factors of UK manu
facturing trade performance do include technological advantage. An all
-manufacturing estimate of trade determination is derived which could
be of use in forecasting, by pooling industry level data. However it i
s shown that using a single data panel makes it difficult to produce a
statistically acceptable equation because the underlying industry par
ameters vary considerably across the panel. Separate technology sub-gr
oup estimates of the impact of innovation on net trade volumes are als
o derived which are more statistically acceptable. The intellectual pr
operty system (in the form of patents) is most significant in protecti
ng sectors with mature technology. In high technology sectors it is th
e bringing to market of an innovation which sustains trade performance
in the short to medium run, and even this advantage is eroded in the
long run. In three sectors in which world trade is dominated by multi-
nationals (metal goods, motor vehicles and aerospace) technological ad
vantage was not effective in supporting UK net trade.