Innovations and manufacturing export performance in the OECD countries

This paper addresses two puzzles in international trade, namely why traditional estimates of income elasticities of exports are implausibly high and why export growth varies much more markedly across countries than can be explained by changes in price competitiveness and variations in income growth in export markets. Using data for 18 OECD countries it is shown that market integration and the level of technology and competitiveness can, to some extent, explain these two puzzles.