Research Interests: Notice and Prometheus
Voluntary non-commercial Internet-based distributed computing ('social sharing' for short) is an open source activity that is emerging as a distinct mode of resource allocation and economic production. This paper presents an... more
Voluntary non-commercial Internet-based distributed computing ('social sharing' for short) is an open source activity that is emerging as a distinct mode of resource allocation and economic production. This paper presents an exploratory cross-country analysis of factors determining the output of the paradigmatic social sharing project, the Search for Extraterrestrial Intelligence (SETI@home). The key hypothesis proposed is that SETI@home output is correlated with the average level of happiness in a country. Happiness is arguably a major motivational factor for participating in this type of project. The second major hypothesis explored is that trust, i.e. a form of social capital, is a less important motivational factor. I find some support for both hypotheses, but only for the group of developed and advanced countries. However, given the data limitations and the simple model tested, the results can only be regarded as suggestive, not conclusive. It is hoped they will stimulate further research into the link between open source and happiness economics.
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It is argued that development of a ‘National Innovation System plus Subjective Well-being’ (NIS+SWB) approach would be a natural extension of current research into innovation systems, ‘happiness’ research and attempts to develop a... more
It is argued that development of a ‘National Innovation System plus Subjective Well-being’ (NIS+SWB) approach would be a natural extension of current research into innovation systems, ‘happiness’ research and attempts to develop a normative theory of innovation that tries to avoid what can be called the long-run fallacy of normative innovation economics, i.e. the axiomatic assumption that innovation and economic growth are always desirable. After reviewing the literature on national innovation systems and recent contributions, from diverse literatures, relevant to the development of a normative theory of innovation, some of the implications of a NIS+SWB approach are explored. In particular, it is argued that the approach requires an evolutionary systemic normative theory, because of the systemic and co-evolving nature of both the NIS and SWB. This has to be clearly distinguished from individualistic (micro-level) welfare theory, although both are best seen as complementary. Confusing societal and micro-level analysis is an example of the ecological fallacy. Further, the choice of SWB measure is highlighted. It is suggested that life satisfaction is the currently preferred SWB measure for a NIS+SWB approach. However, more research into a merger of SWB research and Sen’s capability approach seems called for. Last but not least, some general implications of a NIS+SWB approach for innovation policy are discussed.
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This paper contributes to the recent empirical debate about the effectiveness of the GATT and the WTO in promoting trade. We use gravity models to explore the impact of the GATT/WTO on bilateral trade in a sample of 46 countries over the... more
This paper contributes to the recent empirical debate about the effectiveness of the GATT and the WTO in promoting trade. We use gravity models to explore the impact of the GATT/WTO on bilateral trade in a sample of 46 countries over the period 1965-1997. Our data enable us to disaggregate trade by broad commodity aggregates. The results for total trade are similar to those reported by Rose (2004). However, the disaggregated estimates reveal that the GATT/WTO has had a positive and statistically significant impact on trade in capital-intensive commodities, but that it has had no statistically significant impact on trade in other commodities. The paper demonstrates that simple modifications of Rose's approach lead to results that are much more 'common sense' than his.
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The paper contributes to the debate about the nexus between comprehensive or total wealth, sustainability, social welfare and subjective well-being (SWB). With the publication of comparable total wealth data for more than one year it has... more
The paper contributes to the debate about the nexus between comprehensive or total wealth, sustainability, social welfare and subjective well-being (SWB). With the publication of comparable total wealth data for more than one year it has become possible to have a closer look at the controversial concept of ‘change in total wealth per capita’, which is arguably the preferred measure of economic sustainability and social welfare associated with the capital approach to development. The analysis is conducted for a group of over twenty OECD countries. After documenting changes in GDP per capita and wealth per capita over 1995-2005, the paper explores how closely a number of monetary sustainability indices associated with the capital approach are correlated with each other, i.e. whether they provide consistent messages. While some are highly correlated across countries, this is not the case for the conceptually preferred measure, and all indices sometimes provide inconsistent messages for particular countries. I further analyse how the monetary indices are correlated with a number of composite non-monetary sustainability indices, with average life satisfaction (a proxy for SWB) and with the Human Development Index (HDI). Life satisfaction is interpreted as a societal well-being measure that incorporates not only outcome utility, as in conventional welfare economics, but also procedural utility. HDI is a prominent and broad-based ‘objective’ societal well-being index. Apart from providing empirical evidence on the degree of correlation between the sustainability indices, SWB and HDI, the paper raises a number of conceptual and measurement issues which should be addressed further in the debate about how to measure sustainability and achieve sustainable development.
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Research Interests: Information Systems, Sociology, Computer Science, ICT, The Internet, and 9 moreInformation Economics, Library and Information Studies, The Information Society, Information and Communications Technology, THE USE OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) IN THE EFL CLASSROOM, New Economy, Communication and media Studies, Knowledge based economy, and Internet
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Bruno and Easterly (1998) provide a simple historical description of per capita GDP growth rates before, during and after periods of high inflation crises. The pattern of growth shows resurgence in after-crisis growth to above the... more
Bruno and Easterly (1998) provide a simple historical description of per capita GDP growth rates before, during and after periods of high inflation crises. The pattern of growth shows resurgence in after-crisis growth to above the before-crisis level. The robustness of this finding is tested against justifiable changes in the data sample used and against different crisis definitions. The results show that after-crisis growth rates do not recover to a level above those experienced before-crisis. In contrast to Bruno and Easterly, the important distinction between open and closed economies is emphasized. Only in the former case are their results that growth deviations from the world average after-crisis improve relative to the before-crisis periods confirmed. Finally, the pattern of growth before, during and after deflationary periods is analysed. The data reveal a potentially important asymmetry in the correlation between deflation and growth, and inflation and growth. Low rates of deflation are associated with a similarly negative per capita GDP growth rate as are very high rates of inflation.
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This paper compares alternative wealth estimates reported by the World Bank and in the Inclusive Wealth Reports. Although theoretical limitations and shortcomings are widely acknowledged in the literature, the extent to which the... more
This paper compares alternative wealth estimates reported by the World Bank and in the Inclusive Wealth Reports. Although theoretical limitations and shortcomings are widely acknowledged in the literature, the extent to which the alternative approaches to wealth accounting matter empirically is not well known. Comparing the alternative data in levels, shares, growth rates, and monetary sustainability indices derived from them, major differences emerge between OECD and non-OECD countries. For the former, the alternative wealth estimates seem complementary, but only if a key assumption made in the derivation of inclusive wealth is violated. For the latter, the data seem much less useful. For example, depending on which data source is used, for the group of low income countries the share of natural capital in total wealth is either 36.8% or 60.4%, suggesting that extreme care must be taken if the composition of wealth were to be used to inform policy-making. Neither wealth data set provides a ‘definite guide’ to economic sustainability, but a combination of indices derived from both might be useful in a holistic assessment of sustainability.
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A model of the innovation – subjective well-being (SWB) nexus is needed to advance our understanding of the welfare implications of innovation. Building on an earlier contribution by Swann (G. M. Peter Swann, 2009, The Economics of... more
A model of the innovation – subjective well-being (SWB) nexus is needed to advance our understanding of the welfare implications of innovation. Building on an earlier contribution by Swann (G. M. Peter Swann, 2009, The Economics of Innovation, Edward Elgar, Cheltenham, UK), I first assemble the major building blocks of such a model and then discuss some of the many potential linkages between them. A central feature is the inclusion of multiple SWB impacts of processes as well as of outcomes. Some general issues that would have to be addressed in any empirical application are also discussed. SWB impacts are to be used as an additional indicator in the assessment of innovation, not as something to be maximised. By taking SWB into account, new insights might emerge that could result in either strengthening or modifying existing innovation policies, or in novel policies.
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This study investigates the impact of international trade on real wages earned in U.S. manufacturing during the period 1985-89. Many of the previous studies which try to explain the structure of U.S. industry wages include only the... more
This study investigates the impact of international trade on real wages earned in U.S. manufacturing during the period 1985-89. Many of the previous studies which try to explain the structure of U.S. industry wages include only the negative impact of increased import penetration, or they exclude international trade variables altogether. In order to obtain a more balanced assessment of trade effects, wage equations including, in turn, an import-, export-, and net trade variable are estimated using a generalised least squares procedure. A parsimonious modelling approach is adopted which focuses on a few catch-all variables instead of the large number of variables used in many micro wage studies. It is found that trade had a positive impact on the average real wage, despite the massive trade deficits during the period. Further analysis suggests that it increased both the competitive wage and the amount of economic rent earned by workers, with the impact on the former being stronger than the impact on the latter. However, other variables, in particular capital intensity, had even stronger positive impacts. [F14]
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Don Lamberton asked many questions about the nature and role of information, without expecting to be able to provide tidy or neat answers. The issues he raised have not gone away or been resolved. Some have re-appeared in modified or new... more
Don Lamberton asked many questions about the nature and role of information, without expecting to be able to provide tidy or neat answers. The issues he raised have not gone away or been resolved. Some have re-appeared in modified or new form. This paper first focuses on the analysis of information at the macro-level, starting with the ill-fated ‘information sector’ studies and leading on to current attempts to use neoclassical economics to measure macro-level capital stocks in the context of the debate about sustainable development, also known as ‘wealth accounting’. Wealth accounting has no place for information-as-capital that goes beyond very primitive proxy measures for intangible capital other than human capital. Often, information-as-capital is neglected completely by denoting such capital stocks as ‘enabling assets’ that are assumed to be reflected in what turn out to be unmeasurable shadow prices. Next, an issue mostly neglected by Don Lamberton is discussed – the normative...
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The purpose of this book as stated in its introduction is to explain and explore the modern theories of economic growth, and to make this cutting-edge research accessible to readers with only basic training in economics and calculus (p.... more
The purpose of this book as stated in its introduction is to explain and explore the modern theories of economic growth, and to make this cutting-edge research accessible to readers with only basic training in economics and calculus (p. 2). The author, who is one of the ...
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Don Lamberton asked many questions about the nature and role of information, without expecting to be able to provide tidy or neat answers. The issues he raised have not gone away or been resolved. Some have re-appeared in modified or new... more
Don Lamberton asked many questions about the nature and role of information, without expecting to be able to provide tidy or neat answers. The issues he raised have not gone away or been resolved. Some have re-appeared in modified or new form. This paper first focuses on the analysis of information at the macro-level, starting with the ill-fated ‘information sector’ studies and leading on to current attempts to use neoclassical economics to measure macro-level capital stocks in the context of the debate about sustainable development, also known as ‘wealth accounting’. Wealth accounting has no place for information-as-capital that goes beyond very primitive proxy measures for intangible capital other than human capital. Often, information-as-capital is neglected completely by denoting such capital stocks as ‘enabling assets’ that are assumed to be reflected in what turn out to be unmeasurable shadow prices. Next, an issue mostly neglected by Don Lamberton is discussed – the normative...
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The purpose of this book as stated in its introduction is to explain and explore the modern theories of economic growth, and to make this cutting-edge research accessible to readers with only basic training in economics and calculus (p.... more
The purpose of this book as stated in its introduction is to explain and explore the modern theories of economic growth, and to make this cutting-edge research accessible to readers with only basic training in economics and calculus (p. 2). The author, who is one of the ...
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Many governments are going ‘beyond GDP’ to measure standards of living and to base policy on such wider considerations. One of the more advanced approaches is the Living Standards Framework used by the New Zealand Treasury as a... more
Many governments are going ‘beyond GDP’ to measure standards of living and to base policy on such wider considerations. One of the more advanced approaches is the Living Standards Framework used by the New Zealand Treasury as a complementary input into the policy process. This paper uses the Framework as a case study to highlight shortcomings and unresolved theoretical and empirical issues in the underlying theoretical model (i.e., the capital approach to development based on mainstream neoclassical economics). In particular, innovation is noticeable mostly by its absence, despite being the main driver of living standards in the long-run. It is argued that innovation should be at the centre of the Framework. Moreover, one must go beyond standard welfare analysis and use a model of the innovation–subjective wellbeing nexus in order to assess the many, potentially very complex, wellbeing implications of innovation. Adoption of such a perspective, although currently resisted by many po...
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This paper documents the size, composition and changes in New Zealand's information workforce over the period 1991 to 2001. The estimates are disaggregated into Maori/non-Maori, by gender, and by major occupational categories. The... more
This paper documents the size, composition and changes in New Zealand's information workforce over the period 1991 to 2001. The estimates are disaggregated into Maori/non-Maori, by gender, and by major occupational categories. The absolute as well as relative size of the information workforce has continued to grow during the period, though the relative growth rate is a lot lower than during the 1980s. While the findings for women in general are encouraging, those for Maori, and especially Maori men, are less so. Maori remain underrepresented in the information workforce. Although their participation has increased, the gaps in participation rates between Maori and non-Maori have changed little.
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This paper documents the continuing growth and gender composition of New Zealand's information work force, at the aggregate level as well as by major occupation groups, over the period 1976-96. /nformation occupations have been... more
This paper documents the continuing growth and gender composition of New Zealand's information work force, at the aggregate level as well as by major occupation groups, over the period 1976-96. /nformation occupations have been selected from five-yearly Census occupation data at the four-digit level. After lagging behind the US in the past. the relative size of New Zealand's information work force now seems similar to that of the US. By / 996, about 55 percent ofthefemale workforce was employed in information occupations, compared to 40 percent of the male workforce. There seems to have been relatively faster upskilling of the female information work force. The paper also briefly comments on related, but much narrower, 'knowledge worker ' concepts, i.e. R&D personnel and the workers of the 'digital ' economy, and 011 some of the problems encountered if one wants to relate the work force measures to endogenous growth theory. Finally, a long wish list of ...
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This chapter explores links between national wealth and subjective well-being (SWB) at the macro-level for a sample of 26 OECD countries in 2005. The national wealth data have been developed in the context of the debate on sustainability.... more
This chapter explores links between national wealth and subjective well-being (SWB) at the macro-level for a sample of 26 OECD countries in 2005. The national wealth data have been developed in the context of the debate on sustainability. They are from two alternative sources. After discussing major features of the two wealth datasets, it is shown that combining them can overcome previously reported anomalous findings for some OECD countries, but only if a major assumption made in the construction of one of them is rejected. The main part of the empirical analysis focusses on correlations and regressions. Nonlinearities are particularly important in the case of natural capital. Several non-monetary social and institutional context variables, i.e. trust and the perception of freedom, have higher correlations with the two SWB variables used than do most of the wealth variables measured in monetary terms. The multivariate regressions reveal that national wealth and two of its subcatego...
The World Bank's Millennium Capital Assessment (MCA) has provided per capita estimates of total wealth and its major subcategories for a large number of countries. In this article, these macro-level estimates are used to explore... more
The World Bank's Millennium Capital Assessment (MCA) has provided per capita estimates of total wealth and its major subcategories for a large number of countries. In this article, these macro-level estimates are used to explore bivariate cross-country ‘wealth–happiness’ relationships, focussing on issues of appropriate functional form, parameter stability and outliers. For comparative purposes, ‘income–happiness’ relationships are also explored. Total wealth turns out to be strongly related to Gross National Income (GNI) per capita, due to the importance of produced and intangible capital, but not to natural capital. In contrast, when the most natural capital intensive countries are excluded as outliers, a strong relationship emerges between Subjective Well-Being (SWB) and natural capital, especially amongst high income countries. In these countries, natural capital seems to be an important wealth correlate of SWB, despite accounting for only a very small proportion of total wealth.
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Voluntary non-commercial Internet-based distributed computing (‘social sharing ’ for short) is emerging as a distinct mode of resource allocation and economic production, alongside price-based and hierarchy- (i.e. firm-) based modes. This... more
Voluntary non-commercial Internet-based distributed computing (‘social sharing ’ for short) is emerging as a distinct mode of resource allocation and economic production, alongside price-based and hierarchy- (i.e. firm-) based modes. This paper presents a cross-country analysis of the factors determining participation in the classic example of a social sharing project, the Search for Extraterrestrial Intelligence
Engelbrecht, H-J. (2007). The (un)happiness of knowledge and the knowledge of (un)happiness: Happiness research and policies for knowledge-based economies. Paper presented to the International
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This paper explores whether there are robust correlations between subjective well-being measures, especially life satisfaction, and natural capital per capita (i.e. natural capital abundance) and the share of natural capital in... more
This paper explores whether there are robust correlations between subjective well-being measures, especially life satisfaction, and natural capital per capita (i.e. natural capital abundance) and the share of natural capital in comprehensive wealth (i.e. natural capital dependence), using aggregate data for a cross-section of fifty-six countries. We estimate bivariate correlations as well as multiple regression models, and carefully analyse the importance of outliers. The results obtained for the natural capital variables mirror those in the literature on the resource curse that focuses on GDP growth rates. They seem to suggest there is a „life satisfaction blessing‟ associated with natural capital abundance, and a „life satisfaction curse‟ with natural capital dependence. However, if one concedes that the natural capital dependence variable might be misleading, the balance of evidence arguably shifts in favour of the „life satisfaction blessing‟ finding. Interestingly, for our samp...
The World Bank has provided estimates of total wealth and its major subcategories for a large group of countries in 2000. Total wealth has been interpreted by some to be a measure of social welfare and the object of the sustainable... more
The World Bank has provided estimates of total wealth and its major subcategories for a large group of countries in 2000. Total wealth has been interpreted by some to be a measure of social welfare and the object of the sustainable development paradigm. This paper contributes to the debate about the relative merits of subjective versus objective well-being measures in the context of sustainable development. Using scatter diagrams, correlations and regression analysis, it explores bivariate relationships between the wealth estimates and a widely reported measure of average subjective well-being (SWB) or ‘happiness’. For comparative purposes, correlations between GNI per capita and the wealth estimates are also reported. The cross-country wealth-happiness relationship is very similar to the incomehappiness relationship. However, differences emerge for wealth subcategories. First, the high correlation between total wealth and GNI per capita is mostly due to produced capital and, to a l...
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The paper argues that Treasury’s Living Standards Framework needs to be developed further and put innovation and its well-being effects at its centre. The current relative neglect of innovation in the Framework is, to a certain extent,... more
The paper argues that Treasury’s Living Standards Framework needs to be developed further and put innovation and its well-being effects at its centre. The current relative neglect of innovation in the Framework is, to a certain extent, understandable, given the underlying theoretical model (the capital approach to development) and the lack of a welfare theory of innovation. It is argued that one must go beyond standard welfare analysis and use a model of the innovation subjective well-being (SWB) nexus in order to assess the many, potentially very complex, well-being implications of innovation. The paper first provides a brief overview of the Framework and comments on some conceptual and measurement issues associated with the capital approach. It then introduces a conceptual model of the innovation-SWB nexus and briefly discusses its building blocks (the major concepts and some of the linkages between them). This is followed by a discussion of some recent contributions that lend fur...
The World Bank has published comparable ‘total wealth’ (TW) data for 1995, 2000 and 2005. Building on earlier research, we explore the relationship between average life satisfaction (LSF) and TW, and some related issues (composition of... more
The World Bank has published comparable ‘total wealth’ (TW) data for 1995, 2000 and 2005. Building on earlier research, we explore the relationship between average life satisfaction (LSF) and TW, and some related issues (composition of TW, growth rates, convergence, LSF and natural capital), focusing on twenty-six OECD countries. Furthermore, some have argued that ‘change in TW per capita’ is a more appropriate (economic) sustainability indicator than, for example, Adjusted Net Savings per capita. The paper, therefore, also explores how closely these and other sustainability indices associated with the capital approach to development are correlated with each other, and with some other major sustainability indices. The paper aims to contribute to the attempt to bridge the divides between the ‘happiness’ literature, the literature on comprehensive wealth, and that on the wide range of sustainability indices. This would seem an important step forward in the debate about how to achieve ...
The paper contributes to the debate about the nexus between comprehensive or total wealth, sustainability, social welfare and subjective well-being (SWB). With the publication of comparable total wealth data for more than one year it has... more
The paper contributes to the debate about the nexus between comprehensive or total wealth, sustainability, social welfare and subjective well-being (SWB). With the publication of comparable total wealth data for more than one year it has become possible to have a closer look at the controversial concept of ‘change in total wealth per capita’, which is arguably the preferred measure of economic sustainability and social welfare associated with the capital approach to development. The analysis is conducted for a group of over twenty OECD countries. After documenting changes in GDP per capita and wealth per capita over 19952005, the paper explores how closely a number of monetary sustainability indices associated with the capital approach are correlated with each other, i.e. whether they provide consistent messages. While some are highly correlated across countries, this is not the case for the conceptually preferred measure, and all indices sometimes provide inconsistent messages for ...
The paper explores whether the positive correlation between natural capital per capita and subjective well-being variables found in bivariate regressions at the country level survives in a multiple regression context. Employing a sample... more
The paper explores whether the positive correlation between natural capital per capita and subjective well-being variables found in bivariate regressions at the country level survives in a multiple regression context. Employing a sample of fifty-eight countries, regressions are estimated that also include standard country-level determinants of subjective well-being (GNI per capita, social capital, income distribution, unemployment, inflation), as well as some regional dummy variables. We find that the positive correlation tends to remain. The role of outliers and use of alternative subjective well-being measures are explored. The findings arguably strengthen the case for a ‘new welfare economics of sustainability’ that takes subjective well-being measures into account.
Commons-based peer production is an activity that is emerging as a distinct mode of resource allocation and production of information, knowledge and culture (‘social production’ for short), potentially heralding a new stage in the... more
Commons-based peer production is an activity that is emerging as a distinct mode of resource allocation and production of information, knowledge and culture (‘social production’ for short), potentially heralding a new stage in the development of information/knowledge-based economies. This paper presents a cross-country analysis of factors determining the information and knowledge output of the paradigmatic social production project, i.e. SETI@home. The main hypothesis explored is that the level of average subjective well-being in a country is a motivational proxy variable that can help explain the cross-country variation in SETI@home output levels. The hypothesis that trust might be of lesser importance is also explored. I find support for both hypotheses, but only for developed and advanced countries, not poor countries.
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Voluntary non-commercial Internet-based distributed computing (‘social sharing’ for short) is emerging as a distinct mode of resource allocation and economic production, alongside pricebased and hierarchy(i.e. firm-) based modes. This... more
Voluntary non-commercial Internet-based distributed computing (‘social sharing’ for short) is emerging as a distinct mode of resource allocation and economic production, alongside pricebased and hierarchy(i.e. firm-) based modes. This paper presents a cross-country analysis of the factors determining participation in the classic example of a social sharing project, the Search for Extraterrestrial Intelligence (SETI@home). The key hypothesis tested is that the average level of happiness in a country is a major positive and statistically significant motivational factor for participating in SETI@home, even after controlling for cross-country differences in ICT access and GDP per capita. Another hypothesis tested is that trust, i.e. social capital, is a less important motivational factor than happiness. Both hypotheses are confirmed, but only for the group of developed and advanced countries. JEL Classification: I31, D2, D64, Z13
Page 1. THE ROLE OF HUMAN CAPITAL IN ECONOMIC GROWTH: SOME EMPIRICAL EVIDENCE ON THE 'LUCAS vs NELSON-PHELPS' CONTROVERSY Hans-Jürgen Engelbrecht Discussion Paper No. 01.02 May 2001 ...
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... INFORMATION SERVICES, PRIVATE BUREAUCRACIES, AND JAPAN'S COMPARATIVE ADVANTAGE Hans-Jurgen Engelbrecht* Abstract-This note investigates the determinants of Japan's manufacturing trade structure in 1980. ...
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This study tests the hypothesis that use of in-house information services, which are approximated by the relative size of private bureaucracies or the ‘management sector’, is a statistically significant determinant of Australia's... more
This study tests the hypothesis that use of in-house information services, which are approximated by the relative size of private bureaucracies or the ‘management sector’, is a statistically significant determinant of Australia's manufacturing trade structure. Large private bureaucracies are a feature of industrialized economies. Their growth, and concomitantly huge resource use, suggest that informational and organizational efficiency have become of paramount importance for economic development. However, variables trying to capture these phenomena are neglected in mainstream trade analysis. The study is conducted for a cross-section of Australian industries and the results are compared with those obtained from a similar study for Japan. The empirical results confirm the importance of private bureaucracies as a trade determinant. Moreover, they seem to dominate some major conventional factors. In the Australian case, the new variables capture an increasingly important aspect of ‘human capital’, i.e., its potentially inefficient use due to lack of organizational innovation. Comparison with Japan indicates major structural weaknesses of Australian manufacturing which hinder the development of a revealed comparative advantage and exports. The paper also comments on the controversial debate concerning Australia's current account deficit, and on the broad implications of the study's findings for economic policy. It concludes with suggestions for further research.
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Two features of the US manufacturing sector during the 1980s are its increased openness to international trade and the rise in nonproduction employment relative to production employment. The latter seems to be due to technological change... more
Two features of the US manufacturing sector during the 1980s are its increased openness to international trade and the rise in nonproduction employment relative to production employment. The latter seems to be due to technological change and/or organisational ‘fat‘. In this study, the hypothesis that the ‘organisational factor’ is an important determinant of US export competitiveness and trade in manufactures is tested using industry panel data for 1985–89. The empirical results indicate that, while conventional trade determinants like human and physical capital intensity are still important, technology in both the narrow and wider sense, i.e. R&D intensity and organisational technology, seems to be the major determinant. It is found that large nonproduction employment had a detrimental effect on US export competitiveness. This seems to provide an explanation for the large white-collar layoffs observed since the late 1980s.