An analysis of the competition structure of the sectors according to the technological intensity

Abstract

The purpose of this paper is to emphasize the importance of competition structures in different sectors according to technological intensity, following the important theories of Melitz (2003) and Baldwin and Harrigan (2011). Using data from the 70 main exporters and importers, we estimated the relationship between comparative advantage and the quality/price of products sold through cross-sections between 2008 and 2017. We found evidence that countries that exhibit comparative advantage over products with higher technological content are able to transform this advantage into technological and productive advancement in order to increase the quality of their products. On the other hand, the evidence points out that countries that exhibit comparative advantage over products with lower technological content invest in productive improvement in order to reduce their marginal costs and, therefore, compete in the international market through lower prices.

Keywords:
revealed comparative advantage; competitiveness; quality of exports; price of products