The role and effectiveness of economic policies in improving of export and competitiveness: A review of countries

The countries' gains can be realized in the short term and at a limited level when the attempts to increase their exports by gaining advantages in trade are ignored when non-price competitiveness is ignored. However, when inflation differences and exchange rate changes generally cause these gains, a process may occur in which general economic activities other than exporting sectors are negatively affected, and a decrease in social welfare is experienced. In addition, when exporters become dependent on relative price advantages like the sectors that suffer from inflation and exchange rate, it may adversely affect the long-term development of the exporters' performance. Therefore, it is of great importance that foreign trade advantages that increase exports are based on non-price competitiveness, which provides sustainability to economic growth and increases welfare. This study investigates how economic policies should be shaped in countries that aim to increase exports with competitiveness gains that increase productivity, quality, and innovation capabilities. In this study, the effects of monetary policies, fiscal policies, innovation policies, and indicators related to institutional structure on export and competitiveness are analyzed by panel data analysis method of 35 OECD countries from 2008-2017. While indicating the importance of macroeconomic stability, efficient resource allocation, advanced competitive environment, and R&D activities in general, the findings reveal that practices for relative price advantages are ineffective.