TECHNOLOGY AND TRADE - EMPIRICAL EVIDENCES FOR THE MAJOR 5 INDUSTRIALIZED COUNTRIES

Technology and Trade: Empirical Evidence for the Major Five Industrial ized Countries. - The conclusion that prices alone cannot explain the major disturbances in trade market shares emerges from many empirical studies on international trade flows. This paper aims at introducing s upply-side variables in market shares equations, namely R & D expendit ures and gross fixed capital formation, along the lines of the new the ory on international trade and of the literature on technology and tra de relations. The empirical work is carried out on the major five indu strialized countries and on twenty manufacturing industries. The resul ts show that the supply-side variables have played a crucial role over the last decade.