Product Quality and UK Trade Performance

It has been suggested by a number of authors that Britain's relative decline as a manufacturing economy is not irreversible. In particular, it has been argued, the relative advantage of the developed economies vis‐à‐vis the developing and newly industrialising countries lies in high‐technology and high‐quality products. The relationship between high value‐added production and trade performance in the 1970s and 1980s is explored. Whilst the theoretical reasoning behind the hypothesis is appealing, traditional empirical methods seem unable to offer evidence in support.