Assessing the dynamics of international competitiveness based on high-tech exports: insights from a heterogeneous panel of selected G20 countries

Abstract

ABSTRACT Governments have shown increasing interest in maintaining their high-tech export competitiveness by using policies designed to encourage advances in science and technology and the adoption of new techniques by industry. This article assesses the dynamics of international competitiveness based on high-tech exports, with special reference to selected G20 countries. The analysis uses longitudinal data for sixteen G20 countries over the period 1992–2019. We use second-generation panel data techniques that reveal robust results under the presence of cross-sectional dependence and cross-country heterogeneity. In line with theoretical underpinnings, the empirical results suggest that technological capability and cost advantages/disadvantages play a vital role in high-tech export competitiveness. The overall picture demonstrates that the increasing stock of highly educated individuals has important implications for enhancing G20 countries’ high-tech export market share. On the flip side, the estimated negative linkage between patent applications and international competitiveness supports the general statements of the technology-based trade models. Therefore, while technology dissemination changes the direction of technological absolute advantages, innovative countries may lose their high-tech export market share to less developed countries (LDCs) as factor endowments create a competitive advantage for LCDs.