Technology, competitiveness and specialisation in OECD manufacturing

Purpose – This study seeks to analyse the relation between technology, competitiveness and specialisation in OECD manufacturing. Design/methodology/approach – A regression analysis is first performed explaining the disaggregate manufacturing relative value added market share performance of a series of OECD countries by their relative unit labour costs (ULC), relative own and foreign research intensity and by a catch up term. Estimates are then presented of equations relating an indicator of revealed comparative advantage of value added to similar measures of comparative performance of ULC, or of its component terms, and of R&D expenditure, and the respective results are considered in conjunction. Findings – The results show that, although each time there is evidence of a negative impact of the ULC-based variables, the influence of the technology variables is far more important. Re-estimation on research-intensive and less research-intensive samples shows that the dominance of the technology factors is especially important in the research-intensive industries. The influence of comparative wages on specialisation is, moreover, found to be positive here, suggesting the presence of a significant labour skill effect. Originality/value – The paper confirms the Schumpeterian insights, which have emphasised the relation between technology, competitiveness and specialisation. It stresses the dominance of product qualitative aspects of competitiveness, especially in research-intensive industries.