*

Technology, Factors and

Competitiveness

98
2001 5 18

Abstract
The important index that measures the competitiveness of tradethe
coefficient of specialization unites the output, import and export. Thus
what are the factors affecting the specialization: technology, capital or
labor? In general, the research is concerned about factor intensity alone or
technology alone. And the result is almost the same: the effect is
remarkable. Especially the recent research tends to lay more importance
on the technology. My thesis connects the technology with factors, and
makes positive research on major industries of several representative
countries in the 1990s. Finally the thesis finds out what affects the
competitiveness of trade is different with different industries and different
countries.

Keywords:
Coefficient of Trade Specialization,
TFP (Total Factor Productivity),
Factors of Production (including labor, capital, etc)

..........................................

..............
2.1 H-O ...............................
1
2.2 .............................
2
2.3 ...............................
3
2.4 ...........................
3

..................................... ...
4
3.1 ..................
3.2 ........................................
5
3.3 ...................................
6

.......................................
7
4.1 ...................................
7
4.2 ...................................
7
4.3 ...............................
7

......................................
10
5.1 ...............................
10
5.2 .........

..........................................
6.1 ...................................
6.2 ...................................
................................................

................................................
....................................................

12

13
14
15
17
18

19

Contents
1 Introduction..

2 A Brief Review of Technology, Factor and Trade...

1
2.1 Heckshier-Ohlin Theory................................
1
2.2 Trade Theory on Technology.............................
2
2.3 Dynamic Relative Advantage............................
3
2.4 Technology and Factors.............................
3
3 Basic Model.......................................
4
3.1 Cost and Price................
4
3.2 Demand......................................
5
3.3 Coefficient of Specialization................................
6
4 Choosing Variables.......................................
7
4.1 Choosing Countries...................................
7
4.2 Choosing Industries...................................
7
4.3 Choosing Variables.............................
7
5 Estimating and Comparing Data ................................ . 10
5.1 Coefficient of Specialization...............................
10
5.2 Index of TechnologyTFP........
12
6 Regression and Result........................................
13
6.1 Result I.................................. . 14
6.2 Result II..................................
15
7 Conclusion..............................................

17

References..............................................

18

Appendix....................................................

19

Heckscher-Ohlin

OECD

OECD

1H-O
Heckscher-Ohlin

Deardorff
1984; Leamer 1994

Deardorff 1984
Leamer 1994
------Dosi, Pavitt and Soete, 1990,
Leontief 1953

HO

R&D

R&D

Gruber(1967) Keesing(1967) R&D

Stern, Maskus(1981) R&D
Sveikaukus(1983),

354 1967R&D
Leamer1980
R&D

Hughes1986 UK R&D UK
R&D R&D
Vestal 1977
1981 R&D

HO Posner1961
Posner

Posner

Krugman1979Cimoli1988Krugman

Hirsch1965 Vernon1966 HO
Vernon

1.
2.

Walker(1979)
Vernon
Walker

Hufbauer1970 24

Hufbauer GDP
R&D
Keesing1967 R&D

Romer1990

Grossman Helpman1990

Krugman1987

R&D

MacDougall19511952
R&D Gruber, Metha
and Vernon, 1967; Stern and Maskus, 1981
3

Wells, 1969; Hufbauer, 1970; Finger, 1975

R&D Dozi, Pavitt
Soete1990
Amable Verspagen1995 OECD
R&D
Patrik GustavssonPar Hansson Lars Lundberg OECD

David Dllar 1996 Technological Innovation, Capital Mobility,

and the Product Cycle in North-South Trade

Deardorff1984

Patrik Gustavsson. Par Hansson Lars Lundberg 1995

Technical Progress, capital accumulation and changing international
competitiveness
1
n i = 1, , n, Nij h = 1,, Nij
M j = 1,, M, M k = 1,, m,
Cobb-Douglas j i h ::
m

ki
qhij = Aij xkhij
k =1

k =1

ki

=1

j i j i
m

qij = Aij xkijki

k =1

Berndt(1991)
4

1
ij

Z ij ( w, q ) = A

ki
ki

wkjki qij

k =1

wki

c ( w, qhij ) = Aij1

w
k =1

ki

ki

kj

ki

pij = cij (w) = Gi Aij1wmj kj

k =1
wmj

m 1

ki

m 1

= Gi A wmj kjki
1
ij

k =1

Gi =

k =1

ki
ki

j w
ki

wmj Aiw m 1 kj
=

piw wmw Aij k =1 kw
pij

ij =

pij
piw

Tij =

Aij
Aiw

Wkj =

kj
kw

I j j I
k j j I

ij = B T

1
j ij

m 1

ki
kj

k =1

B j

= wmj / wmw

Spence-Dixit-StiglitzSDS

SDS

ai

M
bi
U = C ijbi
i =1 j =1

=1

i =1

g j i g
j I

p
Cijg = ij
piw

aiYg = ij i a iY g

i = 1/ ( 1 bi ) Yg g piw I

3
j i
j i

rij =

Qij
Cij

Cij + X ijw X iwj

Cij

Xijw I j Xiwj j I Qij

23

{
r = 1+
ij

Y Y j ij iY j
Yj

i
ij
w

= ij i ( Yw / Yj ) +1 4

14:
m 1

1
rij = B jTij Wkjik
k =1

Fj

(5)

Bj Fj 5

ln r ij = ( i ln B j + ln Fj ) + i ln Tij

m 1

k =1

ki

ln Wkj

6
m 1

rij = iTij i kiWkj

k =1

:
1

OECD

3
7

rij =

Qij
Cij

Cij + X ijw X iwj

Cij

Qijt
Qijt + IMijt EXijt

QijtIMijtEXijt

Imijt<Exijt 1

Imijt > Exijt 1

1990199519961997
WTO Database

1Industrial Statistics Database, United Nation Industrial Development

Organization
2International Trade Center Database UNCTAD WTO
url: http://www.intracen.org/menus/countries.htm
3199519961997
419911995199619971998
519911995199619971998
2
a
kilnkjki kj

Kt = (1 t1 ) K t1 + I t1
K t
K t 1 =

= (1 + t 1 )K t 1

It
I t 1
K t =

t 1 + t1
t + t

12% 9.5%
8

1 1995199619971998
2 Industrial Statistics Database, United Nation Industrial Development
Organization
4 url: http://www.ird.govt.nz/resource/publicat/depn.html
i.

hilnhj hi hj

1ndustrial Statistics Database,

United Nation
Development Organization
219911995199619971998

Industrial

c
Patrik Gustavsson. Par Hansson Lars Lundberg 1995
Technical Progress, capital accumulation and changing international
competitiveness

Cobb-Douglas

Q = AL K 1
MaxQ = AL K 1

, s.t. wL + rK C

= wL / C

Q = C

log A = log Q log L (1 ) log K

A
A
logA

60%

1. 19911995199619971998
2. 1997199819992000
3. Industrial Statistics Database, United Nation Industrial Development
Organization
4.

1990199519961997
1997 1990

1996

1.089274
1.289418
1.007434
0.929859
0.963312
0.953229
0.871948
0.970968
3.880306

0.27972
2.41696
0.287563
0.023864
0.291797
0.264256
0.459078
0.108981
2.15352

0.84122
0.835082
1.014833
0.657911
1.038408
1.062578
1.089368
1.201088
1.413639

0.87166
1.387715
0.937018
0.630992
1.001756
0.94311
0.903544
10.11741
0.516241

0.612458
0.503547
1.116004
0.786581
0.615412
0.131703
1.250996
0.389801
0.24863

0.865782
0.800353
1.007844
1.232054
1.047551
0.97375
1.058903
0.921345
1.181833

1.034308
0.834801
0.997798
0.722188
0.989403
0.893837
0.980314
0.940242
0.761891

10

10
90%

5
4
3
2
1
0

3
2

1. 5

15

0. 5

10

1. 5

1. 5

0. 5

0. 5

1. 5
1
11

0. 5

19901997

1990
1.127034
1.244051
0.938246
1.399019
1.027816
0.960688
0.866644
0.912674
1.551581

1995
1.08581531
1.35765998
1.01149149
0.94822931
0.97401211
0.98586684
0.85095578
0.96252574
5.14144802

1996
1.089274
1.289418
1.007434
0.929859
0.963312
0.953229
0.871948
0.970968
3.880306

1997
1.123801
1.443596
1.01456
0.859077
0.964197
0.997013
0.93424
0.988291
5.088195

1993

90

log

A = log Q log L (1 ) log K

1996

-0.31696
-0.45515
-0.33739
-0.44518
-0.47922
-0.57094
-0.38908
-0.42442
-0.35976

0.292974
0.599977
0.471555
0.691546
0.325097
0.11223
0.208047
0.577485
0.508663

0.386119
0.496683
0.375193
-0.04762
0.336209
0.223677
0.390292
0.470296
0.508078

0.250759
0.362792
0.06262
-0.25213
0.151577
-0.02861
0.201697
0.138729
0.480262

0.32042
0.258072
0.465717
0.168689
0.271492
0.561618
0.255484
0.376161
0.434967

0.312662
0.403333
0.221588
0.130547
0.3688
0.415809
0.404527
0.37981
0.372673

0.516858
0.530219
0.435387
0.144193
0.490205
0.46974
0.605858
0.573966
0.617535

12

0.329345
0.200819
0.228
-0.10032
0.169129
0.031354
0.328533
0.34611
0.318456

1990
-0.6628
-0.55229
-0.3115
-0.2941
-0.49286
-0.47723
-0.49141
-0.40851
-0.91806

1995
-0.48277
-0.56863
-0.44465
-0.45227
-0.5977
-0.57012
-0.45459
-0.50241
-0.64261

1996
-0.32059
-0.50297
-0.35133
-0.4593
-0.5506
-0.59313
-0.35244
-0.45558
-0.44782

1997
-0.31696
-0.45515
-0.33739
-0.44518
-0.47922
-0.57094
-0.38908
-0.42442
-0.35976

1997

7
leamer,1994; Deardorff,1984

TFP

N 1

n 1

m 1

j =1

i =1

k =1

ln rijt = 0 + 0 j D j + 0 i Di + 1 ln Tijt + 2 k vki ln Vkjt + ijt

13

(8)

7 4

1:

-1.01E+00***
0.0138
-3.795
1.031
0.05527
-0.0675

0.462
-0.46
3.13E-07
8.59E-07*
1.387
1.107
1.68E+00*** 4.31E-03*
3.797
1.501
2
R
5.04E-01
2.81E-01

-0.457*
-1.367
-0.0642
-0.48
2.87E-07
0.627
7.29E-01*
1.466
2.63E-01

0.15
0.174
-1.061
-0.836
1.72E-07*
1.419
3.30E+00
0.301
4.84E-01

-1.409***
-4.071
0.137*
1.475
-6.72E-07
-0.836
8.69E-01***
4.055
5.13E-01

Adj-R2

0.417

0.176

0.175

0.393

0.427

5.762

3.21E+00

2.45E+00

4.68E+00

5.96E+00

-2.189***

-0.316

-1.848***

-0.117

-4.088
0.01763

-1.249
0.127*

-3.373
0.145*

-0.2
-0.573

1.197
-4.78E-07

1.464
3.00E-07

1.356
1.12E-06

-0.965
1.32E-07*

-0.597
4.11E+00***
3.935

0.622
1.236
1.373
1.71E-01 2.85E+00*** 1.49E+00*
1.202

3.449

1.325

R2

5.23E-01

2.32E-01

5.33E-01

3.95E-01

Adj-R2

0.439

0.168

0.433

0.285

6.22E+00

2.86E+00

5.32E+00

3.70E+00

* 20%** 10%*** 5%

14

2:

R2

0.116
0.427
-0.48
-0.592
9.28E-07
0.831
0.263***
2.269
3.23E-01

-0.0897
-1.29
0.348***
2.357
6.97E-08
0.399
-0.031
-0.862
3.47E-01

Adj-R2

0.234

0.262

0.365

0.277

0.19

0.259

3.652

4.07E+00

5.41E+00

4.32E+00

3.54E+00

4.301

-0.0992** -0.402*** -0.06746*

-1.722
-2.263
-1.299
0.177*
-0.621
0.209*
1.439
-0.864
1.497
-2.74E-07 6.43E-07* 9.02E-08*
-0.739
1.543
1.325
0.146*** 3.92E-01*** -8.63E-03
3.197
2.802
-0.345
4.48E-01
3.60E-01
2.84E-01

-0.1***
-2.115
0.02853
0.333
3.17E-08*
1.256
0.05419*
1.568
0.345

15

1990
1997
1.001604 1.0128321

0.997203 0.8143754
1.001949 0.9969963
0.993839 0.7200952
1.000176 0.9946344

0.99932
0.891576

1.001281 0.9857333
1.000156 0.9518809
1.002598 0.7090178

1990
1997
0.51143
0.558188
0.503313
0.567258
0.389125
0.490841
0.221207
0.181918
0.46277
0.529546
0.483989
0.497597
0.542018
0.700581
0.565946
0.631145
0.635909
0.66061

Justin Yifu LinDevelopment Strategy and

Economic Convergence/

1996
10

16

OECD

GDP

17


Bruce A. Blonigen and Yuka Ohno, (1998), Endogenous Protection, foreign direct investment
and protection-building trade, published in Journal of International Economics, 1998,
pp. 205-227
David Dollar (1986), Technological Innovation, Capital Mobility, and the Product Cycle in
North-South Trade, in the American Economic Review, 1986, pp. 177-190
Deardorff, A.V.(1984), Testing Trade Theories and Predicting Trade Flows, in R.V.Jones and
P.B.Kenon (eds), Handbook of International Economics, Volume I, Amsterdam: North
Holland, pp. 467-517
Harry Flam and Elhanan Helpman, (1987), Vertical Product Differentiation and North-South
Trade, published in the American Economic Review, 1987, pp.810-822
Helpman E. and P.R. Krugman (1985), Market Structure and Foreign Trade, Cambridge, MA:
MIT Press
Ishac Diwan,(1991), Patents, appropriate technology, and North-South trade, published in
Journal of International Economics, 1991, pp.27-47
Justin Yifu Lin, Development Strategy and Economic Convergence, 2001
Katharine Wakelin, (1997), Trade and Innovation: Theory and Evidence, published by
Edward Elgar Publishing Limited
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published in the American Economic Review, 1995, pp.755-770
Kyle Bagwell,(1993), The sensitivity of strategic and corrective R&D policy in oligopolistic
industries, published in Journal of International Economics, 1994, pp.133-150
Leamer, E.E. (1994), Testing Trade Theories, in D. Greenaway and L.A. Winters (eds), Surveys
in International Trade, Oxford: Blackwell, pp.66-106
Michael Hobday, (1995), Innovation in East Asia: the challenge to Japan, published by
Edward Elgar Publishing Limited
Mirela Keuschnigg, (1999), Comparative Advantage in International Trade, published by
Physica-Verlag Heidelberg, Germany
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Trade theories and empirical evidence, Manchester University Press, pp. 66-148
Patrik Gustavsson, Par Hansson, and Lars Lunberg, 1997 Technical progress, capital
accumulation and changing international competitiveness, in Jan Fagerberg, Par
Hansson, Lars Lundberg, Arne Melchior (eds), Technology and International Trade,
Edward Elger Publishing Company, pp. 20-37
Peter C.Y. Chow, Mitchell H. Kellman, (1993), Trade: the Engine of Growth in East Asia,
published by Oxford University Press, Inc.
..1998

. 1991
1994

18

 119901999
1990

1999

35171.1

34228.8

55799.9

55874.9

533.5

620.9

1657.2

1949.3

5169.9

3935.9

10588.6

6950.1

2353.7

2875.8

3112.6

4193.7

3461.5

4101.0

4721.6

5400.6

2244.1

1852.7

3179.6

2682.0

2344.5

2165.9

2874.1

2988.6

1819.7

1703.0

2423.4

2423.4

1232.4

1276.3

2060.7

2384.5

419.8

397.5

691.2

560.8

1206.5

1042.0

409.0

741.4

302.6

264.2

84.1

136.3

464.9

271.9

86.7

95.5

256.0

229.5

98.4

57.8

103.8

84.8

47.1

48.2

49.8

43.0

235.8

179.7

445.8

365.4

218.4

256.8

273.4

488.5

130.4

81.2

317.7

357.6

330.5

230.7

415.3

583.9

292.6

294.5

649.7

844.6

607.7

527.3

1110.8

1146.9

74.2

56.2

93.3

85.2

2.7

3.2

26.7

10.7

36.2

16.7

69.7

38.3

223.0

129.6

453.7

259.4

698.4

650.2

1197.5

1447.5

167.8

49.6

161.7

31.3

56.3

136.0

100.0

97.3

435.5

407.1

1487.4

1367.0

225.2

314.1

575.5

480.1

40.8

123.5

314.0

264.4

1998 1991

2000

19

 2
1990

1.127034
1.244051
0.938246
1.399019
1.027816
0.960688
0.866644
0.912674
1.551581

0.306141
1.778903
0.333864
0.025946
0.729428
0.708645
0.941409
0.290428
5.534949

0.992234
0.995169
0.999081
0.970844
0.995296
0.999934
1.004713
1.006324
1.001246

0.986713
1.071276
0.970541
0.911677
0.976598
1.000586
0.993783
1.021919
0.992097

0.926094
1.01736
0.964482
1.03125
0.968767
0.884986
1.045538
0.874556
1

0.995429
0.991537
1.006498
1.010386
0.998251
1.000805
1.004269
0.99785
1.014164

1.001604
0.997203
1.001949
0.993839
1.000176
0.99932
1.001281
1.000156
1.002598

0.866908
0.787012
1.007677
1.23688
1.032132
0.957861
1.072873
0.910138
1.151326

1.012832
0.814375
0.996996
0.720095
0.994634
0.891576
0.985733
0.951881
0.709018

3
1997

1.123801
1.443596
1.01456
0.859077
0.964197
0.997013
0.93424
0.988291
5.088195

0.246482
2.308969
0.287477
0.03718
0.38802
0.220458
0.382717
0.134019
2.311502

0.842527
0.840429
1.014765
0.647302
1.047274
1.069886
1.09394
1.245201
1.736019

0.877946
1.558452
0.951028
0.644589
1.017035
0.999855
0.941764
54.46512
0.511977

0.618944
0.519503
1.119001
0.712307
0.685291
0.106844
1.257796
0.413564
0.2572

4
1990

20

-0.6628
-0.55229
-0.3115
-0.2941
-0.49286
-0.47723
-0.49141
-0.40851
-0.91806

0.084202
0.185426
-0.25976
-0.1735
0.114897
0.071626
0.0609
0.276239
0.194657

0.424264
0.4279
0.298989
0.153795
0.386153
0.361377
0.388485
0.309871
0.569887

0.167249
0.135173
0.00158
-0.13374
0.089916
-0.12683
0.143548
0.081683
0.255473

0.239327
0.162299
0.457289
0.115099
0.225966
0.209022
0.24109
0.301669
0.154235

0.332211
0.39463
0.213077
0.207148
0.335035
0.351584
0.461382
0.368878
0.458231

0.51143
0.503313
0.389125
0.221207
0.46277
0.483989
0.542018
0.565946
0.635909

0.349732
0.43709
0.338011
0.0958
0.396803
0.435173
0.442991
0.426235
0.433807

0.558188
0.567258
0.490841
0.181918
0.529546
0.497597
0.700581
0.631145
0.66061

5
1997

-0.32059
-0.50297
-0.35133
-0.4593
-0.5506
-0.59313
-0.35244
-0.45558
-0.44782

0.290852
0.636846
0.48678
0.682789
0.448377
0.118656
0.245808
0.652135
0.567936

0.382763
0.515518
0.332017
0.030899
0.302181
0.261947
0.366447
0.40857
0.413606

0.335968
0.428909
-0.02842
-0.05889
0.220013
-0.19161
0.199206
0.129066
0.422361

0.355131
0.318337
-0.11621
0.231766
0.257363
0.335923
0.274308
0.583505
0.279099

21

0
1990

-0.1

1995

1996

1997

-0.1
-0.2

-0.2

-0.3

-0.3

-0.4

-0.4

-0.6

-0.5
-0.7

-0.5

-0.8

-0.6

-0.9

-0.7

-1

1. 6
1. 4
1. 2
1
0. 8
0. 6
0. 4
0. 2
0

1990
1995
1996
1997

22