THE ROLE OF TECHNOLOGY IN MARKET SHARES DYNAMICS

The paper presents the estimation of an empirical model of market shar e dynamics for five industralized countries and 18 industries. The emp hasis is put on the importance of non-price factors of competitiveness , whereas most traditional explanations rest on the influence of relat ive prices. Among the former type of factor, the role of variables ref lecting technological advantage is privileged. In particular, the role of innovations has received considerable attention in the literature on international trade as well as the literature on endogenous growth. In this spirit, the paper introduces patent counts and investment as explanatory variables for the export-market share. The results show th at non-price variables have an important impact on the determination o f long-run competitiveness.