Globalization and upgrading: what can (and cannot) be learnt from international trade statistics in the wood furniture sector?

The measurement of innovation is a complex and ambiguous challenge. Two broad families of measures have been used: those focusing on inputs and those focusing on outputs. Each has its strengths and weaknesses, but neither is able to capture the growing importance of product innovation adequately. In this paper we attempt to throw more light on the measurement of product innovation through the complementary use of data on unit-price and market-share. The analysis is distinctive through its exclusive use of trade data. These measures are applied to the global furniture industry through an analysis of imports into the EU between 1989 and 2001.