Can Variation in Public Policies Account for Differences in Comparative Advantage?

Abstract

This article seeks light on the main claim of the Varieties of Capitalism (VoC) framework that public policies can help to shape comparative advantage, and, to complement existing assessments that have relied predominantly on qualitative data from a few economic sectors. It examines the distribution of export success in a number of economic sectors, in which competitiveness is characterized by either radical or incremental innovation. Unlike previous studies, it does this across all those OECD countries clearly identified in the VoC literature as either liberal market economies, co-ordinated market economies or unclassified. Moreover, it draws on the latest available data at the lowest level of aggregation. In contrast to previous studies, a more appropriate measure of trade specialization, revealed symmetric comparative advantage, is used. Overall, the evidence supports the VoC framework; however, in some sectors, the data raise important conceptual and methodological issues overlooked in current research.

From Typology to Taxonomy: A Configurational Analysis of National Business Systems and their Explanatory Power

“…Such examples and others (e.g., Allen, Funk, & Tüselmann, 2006;Boyer, 2004;Geffen & Kenyon, 2006;Kenworthy, 2006;Kogut & Ragin, 2006) illustrate that although taxonomies naturally lack the analytical gist of typologies, they may usefully complement qualitative and theoretical work. The fact that such assessments are nonetheless still relatively uncommon can be ascribed to the difficulties of obtaining good indicators, on which the success of the resulting taxonomy is ultimately dependent.…”

Institutional frameworks and radical innovation: an analysis of high- and medium-high-technology industries in Germany

“…This study's findings strongly suggest that the 'scientific instruments' sector would, in particular, appear to be worthy of further study. This is not just because the socio-economic institutions typically associated with Germany may, as noted above, be, in some instances, beneficial to radical innovation in this sector, but also because the evidence here and elsewhere (Allen et al, 2006) strongly suggests that German firms are able to compete internationally in a sector that has often been associated with radical innovation. Therefore, the scope of future research should be widened.…”

“…This does not conform to the expectations outlined above. This is certainly a surprising result given the distinction that is commonly made between the technologies and innovation characteristics that underpin these two sectors (see, for instance, Allen et al, 2006;Dosi et al, 2006;Fioretos, 2001;Marsili and Verspagen, 2002;OECD, 2008). However, the sectoral category may conceal a great deal of variation in the activities of establishments within it.…”

“…In short, radically innovative activities in the 'product-engineering' sector may, in some areas, be supported by Germany's socio-economic institutional framework. Further evidence to support the argument that German companies may be capable of performing well in the scientific instruments industry, which forms part of the 'product-engineering' sector and which has been characterised as being marked by radical innovation, can be found in Allen et al (2006).…”

Financial regimes, financialization patterns and industrial performances: preliminary remarks

“…LMEs were found to prevail in terms of patents granted to firms operating in "radically innovative" sectors. Relying on similar notions of "radicality", Allen et al (2006) and Schneider and Paunescu (2012) found that LMEs export more heavily in high-tech industries. These results therefore indirectly testify to the higher propensity of economies with market-based financial systems to explore new technological paradigms.…”