What lies behind export-led growth? An inquiry into the role of price and non-price competitiveness

The paper enters the current debate at the intersection of comparative political economy and international trade on the role of price and non-price competitiveness in influencing export. Through an econometric exploration, we identify price competitiveness as a non-negligible factor in driving export for a set of Organisation for the Economic Co-operation and Development (OECD) countries from 1994 to 2019. The documented price sensitiveness, combined with the institutions and policies adopted to promote export-led growth, casts an unsettling light on the prospects for a recovery, particularly for the Euro area. These worrying conclusions are not, however, unescapable. The emergence of the export-led growth model – with its twin brother, the debt-led one – answered the demand-generating problems created by years of wage share decreases and a steady retreat of the State from its traditional demand management role. Drastically inverting these tendencies would contribute to strongly narrowing the need for export-led strategies.