Export market performance of OECD countries: An empirical examination of the role of cost competitiveness

We investigate the relationship between export market shares and relative u nit labour costs using a long panel of 12 manufacturing industries across 1 4 OECD countries. We ask how sensitive are export market shares to changes in relative costs and what determines tills sensitivity? Both costs and emb odied technology are important, but neither can fully explain changing expo rt positions. We explore whether residual country-specific trends might be linked to 'deep' structural features of economies. Sensitivity to labour co sts: is lower in high tech industries and core ERM countries. Industry elas ticities hate increased, especially in industries subject to increasing pro duct market competition.