This thesis seeks to explain how trade develops, applying the ideas to the Australian water management and technology industry. Disparate explanations and gross generalisations at the macro-level of national economies have hindered the development of a unified theory of trade. While understanding trade at the macro-level is foundational, analysis at the level of the firm is necessary for a comprehensive understanding. Four main strands of explanation have been identified from the literature: competitive advantage and corporate strategy, innovation creation and acquisition, markets and networks, and state and institutional influence. The strands combined form a framework that can explain how and why trade occurs for firms in a particular industry. Innovation leads to competitive advantage which extends a firm’s spatial influence in the market. Networks interconnect the firm with its external environment. The state’s role is to facilitate various processes such as amplifying competitive advantage. / The framework is applied to firms representing the Australian water technology and management industry. This industry is diverse, encompassing small and large firms, and specialist manufacturers and producer services. The diversity is ideal for testing a comprehensive explanation. In addition, the water industry - as a subsector of the environmental goods and services sector – is a potentially valuable export activity. / The empirical work demonstrates that rethinking trade involves insights from the various explanatory strands. Creating competitive advantage and innovation involves processes internal and external to the firm. In the water industry, competitive advantage is a multifaceted concept and can be created by firms possessing a specialist product or service, or having a cultural affinity with clients. Corporate strategies such as inter-firm alliances and intra-firm multinational linkages also reinforce competitiveness. While the size of firms has some influence on competitiveness, size and age do not determine propensity to export. The use of innovation proxies by manufacturing firms increases propensity to export. A weak correlation is revealed between R & D proportion and export proportion; however, there is no evidence of a correlation between the proportion of patents and export proportion. Innovation expressed as appropriate technology, or embedded in specialist services, provides a more convincing explanation of export activity. Localised linkages between related and supporting industries are not a prerequisite for creating competitive advantage or innovative activity. Network theory explains how competitiveness transmits across space. Networks link the internal environment of the firm with external determinants, and explain how actual export contacts are made. Once networks and trust are established, spatial separation is not detrimental to sustaining relationships between key actors. / The quantitative evidence does not reveal significant relationships between innovation, competitive advantage and trade. Qualitative factors explain these relationships more satisfactorily. Cultural affinity, appropriate technology and networks help firms create competitive advantage, leading to trade. The state has a strong indirect influence in facilitating trade and should be an important part of a theory. / Thus an explanation of trade must shift networks to central importance and de-emphasise the role of localisation economies. The concept of innovation also needs to extend beyond an interpretation confined to technological change. The limitation of these interpretations is that they only apply to one industry in a particular place. However, the framework is flexible enough to be adapted to other industries, with certain strands being emphasised and de-emphasised accordingly. The empirical findings also have practical implications for the development of trade and industry policy; for example, flexible industry assistance that facilitates the creation of international networks by small and medium-size firms
| Identifer | oai:union.ndltd.org:ADTP/273059 |
| Date | January 2004 |
| Creators | Nadolny, Andrew John |
| Source Sets | Australiasian Digital Theses Program |
| Language | English |
| Detected Language | English |
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