The impact of technology and structural change on export performance on nine developing coutries

Abstract

This paper explores the relationship between techonological activity and export performance between 1985 and 1998 for nine large developing countries and twenty-five primary and secondary sectors. We use a structural decomposition analysis to show that developing countries tend to concentrate their innovative activities in industries which are technologically stagnant at the world level throughout the period considered. These international trends partly offset generalized national improvements in terms of patent shares. The same occurs for world export shares although countries display a greater adaptation to world demand. The econometric analysis shows that technological activity generates export gains, in high technology sectors if a country expands its innovative activities in industries with increasing levels of technological opportunities; in medium technology moving out of low opportunity sectors; in low technology if it is specialized, in the initial year, in sectors with a large world share growth. We also show that in high tech industries export performance is affected by the technical skills at the initial year; in medium and low tech sectors by the growth rates of, respectively, R&D and foreign direct investments. Country and sectoral specifities affect the relationship between technology and market shares dynamics, and structural changes in terms of innovative activity are a major channel through which tecnological capabilities are translated into export performance.innovation, technical change, exports, development